Is the flame resistance "necessary"? Well no, not if you pack smart and protect the nylon inside a nomex blanket or sleeve, or make sure your blanketed parachute is between your ejection charge and the shock cord, or some other method. Nylon can certainly be used, and has been on many rockets.
The other major benefit of kevlar though is size/weight. For a given length of shock cord, at a given strength, you can pack it MUCH smaller if you use kevlar rather than nylon. This might very much come into play with a 38mm MD rocket. For my money, with an MD rocket, kevlar is absolutely the way to go. But nylon web can definitely be used if you wish and you have the packing space - plus it will likely be a fair bit cheaper.
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