I think I read briefly somewhere that Microsoft already stores foreign emails in foreign data-centers in order to comply with foreign laws better since they target enterprise customers that have those types of absolute requirements. I guess Google might be having their foreign emails pass through US servers at some point?

I'm sure someone else has more detailed/informed answer.

This decision is basically saying that the Microsoft decision was wrong, setting up the possibility of resolution by the Supreme Court.

This article seems to include the explanation: https://www.techdirt.com/articles/20170204/06524836631/penns...

Essentially, Google doesn't claim to be able to definitively segregate what is or isn't in the US at any given time. Including the possibility that the location differs between when the request is made and when the retrieval is done.