because Im not using the DNS server for my client PC, there's no reason it should ever need to resolve anything for any other domain other than example.com
That is correct.
In DNS parlance, server function can be divided into two major categories,
- Authoritative nameservice
- Recursive nameservice
Authoritative Nameservice -- is what you are setting up to answer queries for your domain. An authoritative server answers from information in its own data store and does not need to consult other nameservers in the resolution of a query. (It may receive the data from another server originally, such as in the case of a slave authoritative server receiving a copy of zone data from a master authoritative server, but during resolution of the query it is not asking other nameservers to provide it with data to fulfill the query.) Authoritative nameservers therefore have no need of the root hints, as they do not recursively walk the DNS tree from the root in service of queries, queries are answered from their own data store.
Recursive Nameservice -- is what your client relies on to answer general DNS queries. A recursive server does need to have root hints (either explicitly specified or built into the server) as it needs to know how to find the DNS root to walk the tree in service of queries for which it does not have a priori data.
It is possible (but not generally recommended) to have servers perform both authoritative and recursive functions, but what you are proposing is a very common scenario -- an authoritative-only server with no recursive service.