Not sure whats the play here, there is no world where this can turn out good. Cloudflare is more or less infrastructure provider, this idea of some user delegating permissions to their account to some third party client for infrastructure is ripe for abuses. If companies like AWS are not doing it then its for a good reason.
AWS do exactly this. An example use-case is IAM can grant permission to update a Lambda to a Github action running in a given repository.
In case of AWS, you add Github as an IDP (OIDC provider) and associate a role to it.
Github is now authenticating into AWS, scoped to the github repository where its configured and the AWS role it can assume
Its not really a typical OAuth2 or OIDC flow. And yes its better than storing the keys.
Github is not the OAuth client here.