Why the issue with matches? (Spoiler)

The only thing I can think of is that it comes back later on when John is telling the story to Clementine as Sydney comes in with the breakfast. Also there's a considerable amount of smoking seen in the film, discussions revolving around the lighting of cigarettes occur a few times as well. (Jimmy and Sydney in the car, Sydney offering John a cigarette at the start, etc).

"I'm Jules Winnfield, I'm here to talk to you about the briefcase initiative"

In Reservoir Dogs, Tim Roth's character needs to learn a story of a fictional event and be able to tell it convincingly because it gives credibility to the character he's playing as an undercover police officer.

PTA does the same thing with John C. Reilly's character to make him seem authentic and believable to the audience. Showing a flashback just makes it that much more believable (and entertaining). It's character development 101; nothing more, nothing less. The scene would have been a hell of a lot less funny/interesting without it, IMO. Same thing with the jump cut at the start of the car ride scene. Little editing choices like these are somewhat risky because you don't want them to be too jarring or flashy, but if they work towards a narrative purpose, then they're worth it.

It's called humour.