I'm not familiar with that definition. On the other hand, the Department of Defense explicitly says it happens "if the particular matter will have a direct and predictable effect on that interest". Predictable being "a real, as opposed to speculative possibility, that the matter will affect the financial interest".
The topic is centred around off-hand remarks made by someone as to why they aren't doing something (such as using their own product) and how, as pointed out by willio58, "conflict of interest" is used where there is no actual demonstration of conflict of interest. We're not talking about military rigor, as interesting as that subject may also be.
Again, "conflict of interest" is what people often say when they don't know if it will affect them, but don't want to take the risk. "Regulation requires it", as illustrated in the first comment, is what people say when caselaw actually demonstrates that they would be liable.
The fun thing about language is that it is fluid and can take many forms.
https://dodsoco.ogc.osd.mil/Conflicts-of-Interest/