The reality is your activity can still be visible by the websites you visit and google plus maybe one or two other companies that have good adoption of their trackers. It’s the and google that I think is confusing for users. It can do that because of how widely adopted its tracking token is on websites (realistically as a website owner you need to put it on to get good google ads performance).

The discontinuity is that when you go in Google Browsers private browsing mode Google will still track you by the websites you visit, across the web due to their tracking token, and they are one of the only companies on the web that can actually do that tracking.