so Google will be monitoring whatever on the screen continuously or only when the user say the magic words (this, that, here, there)?

Indeed. "AI-enabled pointer" is misdirection. This isn't an AI-enabled pointer; it's sending screen to AI, which yes, includes pointer position. The AI doesn't live in the pointer. The AI lives, apparently, so thoroughly in the system that it can see and do anything, and the pointer is just a way of giving it context.

Google Recall. Hey, it's all about the marketing.