They should have handled it the same way they do Sync in chrome, and I expect they will eventually. But, as always, unless a service advertises that it's full E2EE and you can verify that, assume it's not.
One part of this that's funny to me:
>>>Also, 2FA QR codes typically contain other information such as account name and the name of the service (e.g. Twitter, Amazon, etc). Since Google can see all this data, it knows which online services you use, and could potentially use this information for personalized ads.
I guarantee you, Google knows which online services you use in about 800 other ways, it doesn't need to scrape it from your 2FA accounts.