The proposal doesn’t say what the interface between the browser and the OS / hardware is. They mention (but don’t elaborate on) modified browsers. Google’s track record includes:

1. Creating SafetyNet software and the Play Integrity API that create ‘attestations’ that the device is running manufacturer supplied software. They can pass for now (at a lower ‘integrity level’) with software like LineageOS combined with software like Magisk (Magisk by itself used to be enough, but then Google hired the Magisk developer and soon after that was dropped) and Universal SafetyNet Fix, but those work by making the device pretend to be an earlier device that doesn’t have ARM TrustZone configured, and one day the net is going to close - so these actively take control away from users over what OS they can run on their phone if they want to use Google and third party services (Google Pay, many apps).
2. Requiring Android Apps be signed, and creating a separate tier of ‘trusted’ Android apps needed to create a browser. For example, to implement WebAuthn with hardware support (as Chrome does) on Android, you need to call com.google.android.gms.fido.fido2.Fido2PrivilegedApiClient, and Google doesn’t even provide a way to apply to get allowlisted for (Mozilla and Google are, for example, allowed to build software that uses that API but want to run your own modified browser and call that API on hardware you own? Good luck convincing Google to add you to the allowlist).
3. Locking down extension APIs in Chrome to make it unsuitable for things they don’t like, like Adblocking, as in: https://www.xda-developers.com/google-chrome-manifest-v3-ad-blocker-extension-api/.

So if Google can make it so you can’t run your own OS, and their OS won’t let you run your own browser (and BTW Microsoft and Apple are on a similar journey), and their browser won’t let you run an adblocker, where does that leave us?

It creates a ratchet effect where Google, Apple, and Microsoft can compete with each other, and the Internet is usable from their browsers running unmodified systems sold by them or their favoured vendors, but any other option becomes impractical as a daily driver, and they can effectively stack things against there ever being a new operating system / distro to compete with them, by making their web properties unusable and promoting that as the standard. This is a massive distortion of the open web from where it is now.

A regulation that if hardware has private or secret keys embedded into it, hardware manufacturers must provide the end user with those keys; and that if they have unchangeable public keys embedded and require that software be signed with that to boot or access some hardware, manufacturers must provide the private keys to end users. If that was the law in a few states that are big enough that manufacturers won’t just ignore them, it would shut down this sort of scheme.