The result: there is now effectively one dominating web browser run by an ad company who nigh unto controls the spec for the web itself and who is finally putting its foot down to decide that we are all going to be forced to either used fully-locked down devices or to prove that we are using some locked-down component of our otherwise unlocked device to see anyone's content, and they get to frame it as fighting for the user in the spec draft as users have a "need" to prove their authenticity to websites to get their free stuff.
(BTW, Brave is in the same boat: they are also an ad company--despite building ad blocking stuff themselves--and their product managers routinely discuss and even quote Brendan Eich talking about this same kind of "run the browser inside of trusted computing" as their long-term solution for preventing people blocking their ads. The vicious irony: the very tech they want to use to protect them is what will be used to protect the status quo from them! The entire premise of monetizing with ads is eventually either self-defeating or the problem itself.)
To begin with, pretty much every government employee in the world has some proprietary software developed within the country for security reasons. Old, even obsolete machines. Out of date software, unlicensed/unregistered software, etc, etc. Much of this is also true of banks.
This means if this is put in place as in the spec, it will affect banks and governments negatively. And as powerful as Google is, I don't think it will win over governments + banks.
But again, all the above could be nonsense, and Google will gatekeep the web. It found itself as the loser in the AI race, and it knows pursuing AI during the ongoing arguments on privacy and who owns the data AI is being trained on - the next best thing is to own the playground where the AI trains. That may not be an entirely bad thing either; sad, perhaps, but as this goes on, and browsing becomes a pain, maybe this will result in people just spending less time online? That's a good outcome in my books.