It is possible to work with Android's permissions model, consider the security challenges mobile devices bring, and still include browser extensions the right way. Google could do it if it really wanted to.
Google is supposed to care about making money because that's how big business works. Everything else — including this newfound interest in making content easier to find on tablets — is just a side effect.
FLoC is currently the best plan to actually preserve our privacy. But because Google is behind it, a lot of other companies are worried that Google will extend its ad platform at the expense of competitors.
Android 12 looks kind of bad, but don't worry. It's not going to look this way on your phone unless you bought a Pixel. For the rest of us, Samsung, OnePlus, and other manufacturers will give Android 12's visual overhaul the polishing it needs.
A Google-designed chip inside the next Pixel sounds like a great idea. But Google has a tough hill to climb if it wants to build its own chipset without breaking the bank or making the Pixel line too expensive to buy.