Using the SkyWatch.AI app for your fights is always optional.
On the policy, item 1b reads "flights must be recorded by the Skywatch app". The term "recorded" used here might be confusing. The meaning of this section is that the insurance policy was properly filed (or put on record).
This simply means you've got approval from the app, successfully purchased a policy received a copy of the policy documentation to your email. Once a policy is officailly activated you may use any controller or app to fly and control your drone and record any footage you like, and still be 100% covered.