An hypotesis can be made by reading Gayle's original datasheet (you can find it linked here).
3.0 FLASH ROM
There is provision for an optional flash ROM device. The intent is that this is a possible replacement for a floppy disk drive
in an extremely low end variant of the A300. The enable for the flash
rom is called -FLASH-CE, and is active in the address range from
$0xA00000 to $0xA7FFFF. This output is enabled when the proper data
strobe is asserted, and the address is in range.
(3.0 in the first line is the chapter number, not a reference to AmigaOS 3.0)
Later the memory map confirms that and also shows a 1MB Workbench ROM area:
0xA00000 to 0xA7FFFF 512KB Flash ROM
0xA80000 to 0xB7FFFF 1MB System ROM selected (optional workbench ROM)
About the 1MB System ROM area, the datasheet says:
2.0 SYSTEM ROM
The onboard ROMs are selected in the address range from 0xA80000 to 0xB7FFFF, 0xE00000 to 0xE7FFFF, and 0xF80000 to 0xFFFFFF.
The ROMs are also selected in the range from 0x000000 to 0x1FFFFF when
the internal overlay signal (OVL) is high (this allows the RESET
vectors to be contained in the ROMs). The internal OVL signal becomes
asserted at reset, and negates on the first write to CIA1 (address
range of 0xBFD000 to 0xBFDFFF.
Note that the total addressable ROM space described above is 2MB; we know from Richard Downer's excellent answer that the 512KB extended CD32 ROMs appear at 0xE00000 to 0xE7FFFF. Subtracting the standard 512KB Kickstart area, this leaves exactly 1MB usable to address another 1MB of ROMs.
This is in addition to the Flash RAM from 0xA00000 to 0xA7FFFF.
As per software support, it should be noted that the leaked AmigaOS 3.1+ source code sports a ROM Disk DOS handler (DOS name ROM:) in the
/os-source/v40_src/kickstart/romdisk directory, that appears to be a copy of the standard RAM Disk DOS handler with write support disabled with data coming from a disk image created with the included
makeromimage command line utility.
So by Gayle's datasheet and the R1 schematics, it looks like the idea could have been to both put Workbench resident modules in the additional 1MB ROM (Kickstart 3.1 scans the 0xA80000 - 0xB7FFFF area too) and also have a 512KB Flash RAM area for the user to add additional resident modules in LIBS: and DEVS: and configuration files (by means of the 2.0+ multi-target
ASSIGN feature, and the ROM disk?).
R2 A1200 Schematics
Note that the Gayle datasheet describes a prerelease version, so things may have changed in the true chip. Indeed, in the R2 A1200 schematics, the Flash RAM is 1MB, which would have provided for space to keep a whole rewritable minimal Workbench installation (a far better idea). It would be nice to try if the existing Gayle can drive the /FLASH line and for what addresses.
So it looks like the idea was not for the Flash RAM to be used to store an upgradable Kickstart (the most sensible choice of all, although handling an incorrectly programmed Flash Kickstart would have been tricky).