Yes, that's the flaw.
Assuming that P1's arrival throughout the one-hour interval has constant probability is wrong.
If the two persons are John and Joe, the assumption is true for Joe: his arrival is equally likely at Noon, 1:00 or anywhere in between.
If he arrives at Noon, the probability that he's the first to arrive is unity. But that probability decreases with time, being zero if Joe arrives at 1:00.
So the arrival probability for P1, the first person to arrive, is weighted heavily away from the last 20 minutes, where the meeting probability is unity.
This error can appear in discrete problems when the enumerated possibilities are not equally probable.