Do you have any reference for that pressure from Google? I thought it was because during one of the major version merges the underlying code changed so much that the entire feature would've needed reimplementing from scratch, like many other Cyanogenmod era features.

Edit: source here https://news.ycombinator.com/item?id=28096873

Privacy Guard also wasn't as complete as XPrivacy (and its evolutions) were. It's a shame that the feature disappeared, but I don't think it mattered much to begin with.