This step is optional but recommend. Firebase is a free service with unlimited usage, so there won't be any issue if you decide to use it. You should only avoid this step in following scenarios.
You plan to use devices that don't have Google Play Services (Google Play Store).
It is required to create a customized APK to use the app with Firebase. If you don't want to a create customized APK, then you should skip this step.
You don't want your app to depend on any third party services like Firebase.
You will be required to access the Firebase project you created in this step to create a customized APK, so make sure you remember your login credentials.