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.