Well yeah, that’s all it ever was. The lawsuit was because of misleading/deceptive statements made by Google, which led some (intentionally misinformed) users to believe that Incognito Mode was more private than reality.
Basically, the company knew some users believed Incognito Mode hid their browsing activity. Not just from their local machine (via no logged site history, clearing cookies, etc), but also by hiding it from prying eyes like Google. Some users genuinely believed Incognito Mode was basically some sort of combination of Tor, degoogling, VPN, tracker-blocker, etc… And Google actively encouraged this incorrect belief, because they could continue to siphon off users’ data when they thought they weren’t being watched. The active encouragement of incorrect beliefs is what the lawsuit was about, not the data collection.













That disclaimer was actually a result of the lawsuit. It didn’t always say that. Google was sued for intentionally misleading users, by tacitly encouraging their misheld beliefs that it made them invisible. Basically, Google wanted to track users. And Google knew that some users trusted incognito mode way too much. And instead of correcting that, they actively misled users into believing that incognito mode was more secure. Because if users believed they were invisible, Google could continue to track them when they thought they weren’t being watched.
They got sued for those misleading statements, and lost. And now the splash screen specifically says that Incognito Mode doesn’t make you invisible.