I believe I get to downplay that because the federation they joined helped grow their own network, and allowed them to do Google Talk for other domains. I know many companies that have moved their XMPP stuff to Google for that.

Now those outside contacts are cut off, without any warning. Worse, they see their inside contacts online, can send them messages that never show up in Hangouts!

Those big players are hardly affected, though. Also, Google could simply block those entities that don't fully federate (only).