From this documentation on iTunes connect, in the section on uploading builds it says:
Use Application Loader if your app includes in-app purchase products that need to be configured for the app
https://help.apple.com/itunes-connect/developer/#/dev82a6a9d79
Why does Application Loader need to be used if the app has IAP? So if the app needs to be tested internally and externally first, does that mean it gets submitted to TestFlight for testing, but then cannot be submitted from TestFlight and Application Loader has to be used?
Seems bonkers, is the documentation inaccurate?
The documentation is saying that you need to use Application Loader if you need to configure products for in app purchase. Some types of in app purchases have artifacts that Apple hosts for you and downloads to your app when the user purchases them. I believe that is what the documentation is talking about. Those items get uploaded with the Application Loader.