Laundry rooms are not a good place for gas fired combustion appliances due to the chemicals tht go airborne of detergents etc. Many manuf have exclusions in warranties for this. You absolutely do want the combustion air intake on this unit. What happens in homes is we have all kinds of fans (bath, stove, etc) blowing air out of a house and have very little bringing air in. We have essentially taken the technology of the thermos bottle and applied it to home construction, so the infiltration into the building is greatly reduced. Your unit will operate better, have less service requirement and last longer with outdoor combustion air.

The installation instructions state that I need an intake vent that leads outside.

outside combustion air.
direction specify this for a reason, not just to give an 'option'. take for instance gas furnaces inside closets
you don't see louvered doors @ gas furnace closet as new installs...only on old installs. there is a reason for that also.

what is your location?

here in south La. we put tankless water heaters on
the outside of the house, as it doesn't get cold enough
in the winter for it to be an issue.
Over the summer I was in a client's house where
they had installed a tankless gas w/heate in the
laundry room. it was HOT in there with just the w/heater
in operation...can't imagine how uncomfortable it
would be with both w/heater & dryer operating.

best of luck.