We know that it doesn't occur in any of the films except the Universal Newsreel, and we don't know the source of it. We don't know who took the film in the garage.
And we know that not all versions of the Universal Newsreel show the muzzle flash. The one on the government website shows it, but I found a version of it on Youtube which does not have it.
So, here they are, with and without the muzzle flash.
So, the lack of a muzzle flash in the other versions is certainly a cause of concern and doubt. But, in addition, it seems that the muzzle flash comes too early, before there is the slightest reaction in anybody, including Oswald.
Keep in mind that if you're out shooting, and you expect to hear gunfire, it isn't startling. But, the sound of a gun blast, especially at close range when you don't expect it, would be startling to the max. And what about Oswald? Did he not know that he was shot?
This is the frame that follows the muzzle flash:
So, the muzzle flash has come and gone. Notice that there is still no reaction by anybody. Oswald has a bullet in him, but he doesn't seem to know it.
This is the frame after that:
Is there any reaction going on? I'm thinking that maybe Oswald has closed his eyes. But, let's keep going.
Still, I'm not seeing anything definitive in the way of a reaction.
And then it goes all blurry:
So now, Oswald is presumably reacting, but it's too little too late, in my opinion. I say the phony muzzle flash was inserted too early.
And why, if there was a muzzle flash, is it not seen in the film used by Edward Chiarini?
In the very next frame, you can see a distinct grimace on Oswald's face, so you know he has been shot. So, either in that one or in this one, we should see the muzzle flash, but we don't. And by the way, we don't know the source of this film either; we don't know who took it. But, it is obviously a different film, and the angle is such that it should show the muzzle flash. What would hide it?
The bottom line is that there are compelling reasons to doubt the authenticity of the muzzle flash in the one film, chiefly, its misplacement in time, and the fact that it doesn't appear in other films when it should.