I can see why they thought this was a good change. It makes the UX for G-suite apps much more pleasant, almost like you get the full functionality of G-suite productivity stuff as part of installing Chrome. For most people, that's a good thing.

I think as tech people we systematically tend to under-think the second-order effects of the systems we build. Case in point, Chrome and G-suite being that closely integrated brings up serious privacy concerns, and the part where the Chrome team doesn't seem to appreciate the nuance reflects poorly. I do cybersecurity now (didn't used to), and a good number of problematic things I run into just come from engineers like my previous self not thinking through the security implications of a specific design, mostly because not thinking about security means shinier UX delivered on less resources.

Just another example I encounter regularly: I use U2F to sign into my Google accounts. However, when you log in, the checkbox to "trust this computer" is checked by default, meaning that if you're not paying attention your account will get automatically downgraded to single factor authentication going forward. It's a clear nod to convenience, but done this way it makes you shoot yourself in the foot.