This support article gives more details here, even though it's still clear as mud that they are dropping support for custom domains _unless_ that domain is hosted via Google Workspaces:

https://support.google.com/mail/answer/17101213

Even more confusing, you _will_ be able to still send to a custom domain via the Gmail mobile app? This appears to be an anti-spam move I guess? Though personally, this is a big breakage for me...