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Is there a higher risk of the user's account being blocked by Google after using this?

We haven't seen that at all. 10's of millions of users have used apps built on this SDK.

I think the reason it isn't an issue is because Gmail (the client/server) doesn't really know that there are extensions running

Does it work with manifest V3?

It does! That was actually one of the motivations for open-sourcing.

Great, I think this should be in documentation, couldn’t find it on GitHub as well