I think the main reason is that niri is not included in home manager by default. So that repo adds the ability to configure niri through home manager. nixpkgs only provides the package to run the niri binary. Niri-flake adds handy config options, creates the config file, etc. Also I think there were some issues with the "official" niri package, which that flake solved? I dont remember the details.
It seems like wayland.windowManager.niri.settings is defined in home-manager/modules/services/window-managers/niri.nix. Is this not all you need to configure Niri through home manager, or do you need something more? Actually, looking closer at the repo, the earliest commit to niri.nix is actually from 28/07/2026, so it might just be that the home manager module is so recent that information on the internet hasn't caught up yet.
Thank you.
That's the master branch and, as you noticed, it was added after the 26.05 release (that's why I didn't find it when looking through home manager options). So it's likely that after that module is finished and released, niri-flake won't be needed.
(To be pedantic, niri-flake was never "needed", it just provides useful options/functions so you don't have to write them yourself. And it could be the case that it will still provide some things that the home manager module won't, though I can't think of any examples)