But then, there's no TOS at this URL, and there's no point in taking this repo down, it would only make Google look bad and give microG free advertisement.
That's the most likely route they will take. It keeps their hands clean, as they can drum up a perfectly valid technical reason to break the API.
Also note that most Google ToS don't specifically forbid third party usage (and some also specifically allow them), the only thing that's forbidden is to misuse APIs in a harmful way. Just another example would be the login/account management part of microG, that uses the publicly described OAuth APIs, obviously intended for third-party use.
Edit: That license might just be for FOSS components used within google play services, I'm hard pressed to find any specific license anywhere.