If you still work for Google I recommend reading privacy design docs for random large scale services if you're able. It's very telling what the priorities are.

And I agree that they mostly don't want to be Palantir-like. They mostly don't care about people. They care about advertisers. Any new targeting mechanism they can offer advertisers they absolutely will. The problem is they sit on a gold mine of very, very sensitive personal data (most of it "anonymized"). Most of it can be de-anonymized with little work. Worse, they will absolutely cough it up to the government when required. They also have a lot of motivated engineers thinking of ways to try to use said data to "improve products". Like the whole saga of doing activity inference for Android users. You don't even want to know about how stupid and creepy that is/was.