My understanding is that they get a lot of demands from law enforcement for this data, so they would rather not have it.

I didn't see anything in the article that said they are (for sure) not retaining this data.

"Google could purge some or all of your location history when it sunsets Timeline’s web access" -- or they might not. It just won't be available to the user.

What would be the point of moving to an on-device approach AND keep the data remotely as well? Just keep it remotely as it currently is, no?

That google maps feature was probably supported by a team of 5 that they decided they didn't want to use for that anymore.

And some PM decided they could get a promo by 'unifying interfaces to simplify and enhance the user experience'