As per the android developers site, minimum sdk for Instant app is 21, ie 5.0. link
The site clearly states : Android Instant Apps are available on the majority of
That requirement might be due to android run-time permission support Requesting Permissions at Run Time as official document mention
Note: Beginning with Android 6.0 (API level 23), users can revoke permissions from any app at any time, even if the app targets a lower API level. You should test your app to verify that it behaves properly when it's missing a needed permission, regardless of what API level your app targets.
Currently it has been fixed with android studio 3.1 Canary 5