Assuming this is aimed at business use: good, but too little too late.
Tacking on chat features isn't going to bring businesses back from Slack and Teams. The ship has sailed. Email exists as a lowest common denominator and a way for lead generators to harass people who don't actually make procurement decisions.
The bit that kills me is that “make Google Chat not suck” doesn’t seem to be in the list of options for addressing this problem at all. I work for a company that uses GSuite and chat is universally loathed with a bunch of Slack instances running around the company, both sanctioned and unsanctioned. If they spent time working to improve chat, the momentum of being a GSuite company would carry the rest of the weight here. It doesn’t have to be better than Slack, just closer.
I mean that it's no longer actively being improved as a competitor to other forms of communication. Chat has taken over the world in both personal and business settings.
It's not going to die because it's the de facto default when nothing else is available, but it's also not going to rise up and compete with modern chat solutions which are already ten times as feature rich and continuing to evolve.
It's not meant to, I think it is perfect for the role it fills. I see it as thriving at what it set out to do, neither on life support nor struggling to maintain its achieved identity.
Always trying to improve things is often a very real problem. Email, like so many other things should have been, is best left as is.
I'm not arguing that it's meant to, I'm arguing that Google's attempts to add features to it to try and compete as a chat operations solution is futile.
Email being on LTS is fine, as I said, it'll never go away. That doesn't mean we have to dress it up in chat bubbles and emoji reactions under the pretense that it's something more than that.