I imagine Alphabet’s end goal is some kind of intrinsic understanding of every single person on a biological level in order to better target and serve them ads that fit them.
It's the opposite; Google's seeing that their revenue stream is very near a monoculture and they know monocultures can't last forever. A lot of their initiatives (cloud, video, wearables) are trying hard to find an alternate revenue stream that will be as profitable as ads so that when the industry inevitably crashes (not because of anything specific they can predict, but because all industries eventually do) they're not powering their entire empire off of a single river that just dried up.
Sure, they can morph into different mediums and appear in different contexts, but that doesn't make them "not ads."
Online ads specifically have enjoyed premium value over even "traditional" print and television ads because of highly-specific microtargeting; there's a combination of demographic data and ad targeting that an online service can use to offer expectations that you're paying specifically for the high-value slice of people you want to reach. It's an expectation that print and TV (being wide-cast, non-customized experiences) have difficulty offering.
Various phenomena (market regulation, the Facebook / Twitter data walled gardens, the proliferation of ad- and script-blockers) threaten the guarantees that online advertising has been able to make, and it's unclear that Google's high-cost-of-operation empire survives unscathed if money flows away from premium online ads (either by advertisers going to alternate channels or by advertisers saying "Your value-add claims are bunk and I'm not going to pay for them").
0) Google's only purpose is to make money.
1) Google's strongest strategy (by orders of magnitude) for making money is targeted advertising.
2) Google has surpassed the critical size threshold beyond which morality plays no role in business decisions (see surveillance state-supporting tech in China among other issues).
Due to these facts it appears inevitable that Google will seek in all of its large-scale actions to involve ad tech in whatever it produces or engages in. It's how they fulfill their purpose (selling the most sophisticated targeted advertising possible).
A naive approach would be to hyper-optimize on ad targeting to pursue rule 0, but Google does its best to not be naive. The company's ownership model is designed to target the long game, which is what they seem to tend to do in their decisionmaking much of the time.
That isn't to say that advertising doesn't factor in or that they definitely won't ever use biometrics for ad data, merely that "We could use this for ads" probably doesn't by itself justify buying Fitbit. But potentially uses in advertising and Assistant might.
Not because they think that's the right course of action but rather because they'll get fired if they don't.
Cognitive dissonance overwhelms me.
Why would they be any less trustworthy than the hospitals or insurance companies who normally has this data?