You can directly connect VDD_FLASH to +3.3V. I have >1000 24/7 working devices in the field that are wired like this, so I'm quite confident
The reason for having that pin separate is that if you find yourself in a situation where you need to directly re-flash the SPI flash chip (e.g. after a failed attempt to update uboot), you can apply power via VDD_FLASH to the SPI flash chip without powering the SoC (MT7688).
This allows to re-program the flash using an in-circuit SPI flash programmer. The diode allows this without changing anything on the board (no jumpers required). I guess the 50Ω resistor is there for noise reduction.
If you wire VDD_FLASH to 3.3V directly, there's no way (except cutting traces on the PCB or unsoldering) to get a ruined uboot re-flashed. For my devices, I decided I will never touch uboot once they are produced…
The HW reset thing is another story - this extra circuit is needed to make the SPI flash reset (by interrupting its power supply during HW_RST) to ensure the address mode is right for the MT7688's startup.
If I recall the details correctly, address mode needs to be 3-byte during boot, but the firmware might later switch it to 4-byte. If then a reset occurs, the SPI chip is in 4-byte mode and the MT7688 tries to boot with 3-byte, which fails and leaves the device inoperable until power-cycled.