From a purely academic perspective, it means from noon preceding a leap second to noon after the leap second there's a difference between UTC and what google (and anyone else who does smears) reports as the time. If you really hated yourself and were trying to use timestamps from conflicting sources to order transactions in a database, for example, this could mess up the order of your transactions which could have all sorts of fun consequences.
Systems that use atomic clocks might have been able to do 10,000 transactions per second will suddenly only be able to do 2 transactions per second if they contain a node that doesn't use the same smearing.
Yes I could come up with an algorithm where this is a problem, but in most cases I’d favor a solution that doesn’t depend on separate systems having clocks perfectly in sync.
If you don’t, then you already have to deal with standard drift with ntp anyways so Googles time smear is the least of your problems
https://dl.acm.org/doi/10.1145/112600.112601
Google spanner uses stuff like this with a clock called TrueTime. I don’t know how leap seconds / smearing is handled in that system.