I could see how this could scare the average user into thinking their contacts are moved from Google to facebook and stuck there, thus loosing their ability to use them within Google's products.
Do you think this is the intention?
Google is so engineering-oriented, I can't tell if this was an honest, poor choice of wording or intentionally vague for the purpose of inducing fear. I'm not against the warning if it's in the spirit of educating users about how to keep their data "free", but if this is indeed vendetta as others here are suggesting...well, that's Google's prerogative, but this method would seem a bit unprofessional. If they want to attack Facebook, I'd have more respect if they were explicit about it in this warning.