Your phone stores the code on the device and does facial recognition locally. Apps on your phone only receive that data if they explicitly request your camera and perform the recognition themselves.

This is vastly different than sending Google a video of your face that they save on their servers and use to analyze future selfie videos.

But assuringly its just an encrypted passcode created with an algorithm using measured face data.

From the article:

Selfie videos can be used for login purposes, to verify your age for accessing certain account features, and to create an AI avatar.

It's not just an encrypted passcode.