These things aren't conspiracies. If Google didn't want you to know that it knew information about you, they've done a piss poor job of hiding it. Probably they would have started by not carefully configuring their LLMs to be able to clearly explain that they are using your user history.

Instead, the right conclusion is: the LLM did a bad job with this answer. LLMs often provide bad answers! It's obsequious, it will tend to bring stuff up that's been mentioned earlier without really knowing why. It will get confused and misexplain things. LLMs are often badly wrong in ways that sound plausibly correct. This is a known problem.

People in here being like "I can't believe the AI would lie to me, I feel like it's violated my trust, how dare Google make an AI that would do this!" It's an AI. Their #1 flaw is being confidently wrong. Should Google be using them here? No, probably not, because of this fact! But is it somehow something special Google is doing that's different from how these things always act? Nope.