If this works as described and there are no tricks (such as Google changing your account password from their servers to a known password and then logging in), then that is a great step in the right direction.
A very important next step would be to make this a required feature for all handset developers who wish to use Google services such as the Play Store. As long as it's a niche feature only used on the Pixel, it's more of a good gesture than a substantive benefit for users.
They implemented countermeasures on their devices to prevent the exact situation where the FBI would compel them to produce a signed, backdoored, firmware like they wanted Apple to do after San Bernadino.
https://android-developers.googleblog.com/2018/05/insider-at...
Unless you have the device's passcode, you can't update the firmware that deals with passcode checking, unless you wipe the data.