Hangouts functionality basically still exists, just under a different name. It's still integrated in Gmail, with the same contact list, and all the previous conversations from Hangouts were still there. It's so similar that I bet many people don't even realize anything changed.
This is unlike, say, Reader, which was canceled with no replacement to this day.
Keep isn't dead. I use it everyday on my personal and business account. I love keep. I will be sad when the inevitably kill it though.