This is fucking brilliant news. It's kind of weird that Google hasn't already been penalising websites for stupid small fonts or stupid bad contrast -- both of which have some kind of legal implication (for some websites in some jurisdictions (disability discrimination laws)).
> So Google appears to be arm-twisting me as a web developer into crippling my sites
No, Google is forcing you to stop excluding people. People with disabilities tried asking nicely and web-devs and designers ignored them, so force is needed.
> * Also as a web user, I generally hate it when websites serve a stupid big-text mobile version
I'll just parrot what people have been saying to people with visual impairment for very many years: learn to zoom.