So the answer was very easy....it was ME doing something wrong with the send email address in the test lead I was using. Here is the easy and correct way to do this:
SMART LIST:
Trigger - Data Value Changed (and pick the field that will be changed. This MUST be a field that exists in both instances, or this will not work.)
Flow - Send Email - Pick the email you wish to send. If you use alert, it will go to the lead/contact owner.
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