Well, with backdoored HSM module tracking is the least of your problems.
This is an odd phrasing since a cryptographic hardware key does allow tracking (in a different way), so the fact it's different seems hardly relevant. For example a compromised Titan M could open you up completely to MITM of any network connections your device makes.
It could also allow any entities that already have some limited access to your device (i.e. an app restricted via OS perms) to gain broader access to sensitive data on your device.
If you need protection against malicious states or corporations specifically targeting you, this isn't good enough for the reasons you point out.
If you just want to avoid google tracking you via their various services to show you ads, this is probably sufficient.
I just thought the phrasing was a bit odd and absolutist, and somewhat misleading. I'd generally put a reasonable amount of trust in a Titan M personally - the risk factor compared to Play Services is minuscule - but I still want to be aware of the mechanisms of risk. Implying it's non-existent doesn't help anyone.