The much maligned "Trusted Computing" idea requires that the party you are supposed to trust deserves to be trusted, and Google is DEFINITELY NOT worthy of being trusted, this is a naked power grab to destroy the open web for Google's ad profits no matter the consequences, this would put heavy surveillance in Google's hands, this would eliminate ad-blocking, this would break any and all accessibility features, this would obliterate any competing platform, this is very much opposed to what the web is.
How does this affect browser modifications and extensions?
Web Environment Integrity attests the legitimacy of the underlying hardware and software stack, it does not restrict the indicated application’s functionality: E.g. if the browser allows extensions, the user may use extensions; if a browser is modified, the modified browser can still request Web Environment Integrity attestation.
In other words, you don't have to worry about the removal of ad blockers. At least, not through this Google proposal.