Given that the official Google Play store has distributed intentionally malicious apps in the past, I'd say it reduces it by approximately none.

I'm sure it's a non-zero effect.

It'll also paint targets on the backs of people who are using newpipe, greyjay, and pipepipe. I'll be interesting to see if they try to coorelate people running adblock as pirates and start dumping google accounts. You could run those apps logged out prior and remain anonymous. It's very likely package installed will rat you out now.

It's possible that part of why those attacks don't really happen is precisely because it's already so controlled. That said, I still think this is BS. Don't mistake me as defending Google here.