The scenario the GP outlines is one where Google is the sole licensor of Chromium. They could then build proprietary (or whatever!) versions of that however they liked, since they'd have copyright to the whole thing.

If Chromium were AGPL they couldn't build a proprietary service. They couldn't even build a service that earns them money but can't be copy pasted as-is by anyone else such that it would earn money to someone else. That's the whole point. If one benefits, everyone benefits

The point is that if you have the copyright to a project and you release it as AGPL, it has absolutely no affect on what you can do with it. You can also relicense it to others and tell them they don't have to follow AGPL either.

So if Chromium were AGPL, Google could do anything they felt like doing with it, just like now. Google just wouldn't be able to keep anybody else from doing stuff with it for versions that they released under AGPL, as long as those people didn't violate it.