The fact that these proposals are compromises is precisely what makes them so potentially effective.
Instead of playing the usual game of cat and mouse where browsers move to block tracking and ad providers respond by coming up with creative ways to circumvent those restrictions ad infinitum, Google is creating a mutually acceptable compromise where ad companies don't have to fight against user privacy in order to make a profit.
It sounds like you believe you've got the upper hand in this fight, so you're more inclined to push for unconditional surrender rather than a peace treaty. That's understandable, and if you want to go that route I'm sure there will be other browsers and browser extensions which will continue to pursue that strategy. Just as, as you say, there will probably be advertisers who continue to peruse the "gather as much data on users as possible" route (though Google plans to fight those advertisers themselves to maintain the truce). But that's not the only valid solution to the problem, and I'm glad to see Google offering an alternative.
I do think that blockers have the upper hand, but even if they didn't, I wouldn't trust a compromise solution like this.
As a reminder, we're talking about an industry that uses wifi signals to track customer's positions through stores, that has embedded trackers in TV sets, that has bought credit reports on customers. The advertising industry is addicted to data; that's not going to change just because Google says so.
If Google's compromises here made me think that that advertisers weren't going to use fingerprinting any more, then I'd be more open to the idea. But even Google isn't pretending that proposals like FLoC will mean that browsers won't have to block fingerprinting.
And post DNT, I don't even trust that it would only be occasional bad actors. Advertisers have made it obvious that they're willing to compromise on privacy only if it doesn't cost them anything at all. The moment people en-mass start using private options, they'll back out of the arrangement the same way that they always have under the excuse that they have to stay competitive with advertisers who do fingerprint. Give it a year, and we'll be seeing think pieces about how FLoC just doesn't provide enough granularity, so we have to use FLoC and data-point X to be competitive.
So if we compromise with the advertising industry, and we still have to block fingerprinting to prevent bad actors, and it's the same amount of work to plug the same number of holes, what do we actually get out of this arrangement as users? It's not just that it's a compromise, it's a compromise that has no value to anyone except advertisers.
Seeing as how Google themselves (possibly the world's largest advertiser) seems willing to compromise, I don't think it makes sense to assume no other advertising company will be willing to follow them down that path. And even if no other advertisers were participating, isn't the fact that Google themselves are participating already a huge win? They are a pretty big player in the advertising industry after all.
As a user, what you get out of this arrangement is that a large number of online advertising agencies will stop trying to build systems that track your online activity, because they won't need to track you anymore to run their business effectively. They can get what they need in a way that doesn't hurt user privacy.
Yes, there'll be bad actors, but as you said that's a problem we'd have anyway. At least this way the number of bad actors will be reduced, and the economic advantage gained by such misbehavior will be minimized. Why would an advertising agency bother spending a ton of money trying to develop new fingerprinting techniques to fight cookie blocking if doing so doesn't result in any significant revenue increases over just using FLoC?
In effect, Google is fighting a two-pronged battle against online tracking: they're increasing the cost companies need to spend to track users, while simultaneously decreasing the economic benefit gained from doing such tracking in the first place.
Instead of playing the usual game of cat and mouse where browsers move to block tracking and ad providers respond by coming up with creative ways to circumvent those restrictions ad infinitum, Google is creating a mutually acceptable compromise where ad companies don't have to fight against user privacy in order to make a profit.
It sounds like you believe you've got the upper hand in this fight, so you're more inclined to push for unconditional surrender rather than a peace treaty. That's understandable, and if you want to go that route I'm sure there will be other browsers and browser extensions which will continue to pursue that strategy. Just as, as you say, there will probably be advertisers who continue to peruse the "gather as much data on users as possible" route (though Google plans to fight those advertisers themselves to maintain the truce). But that's not the only valid solution to the problem, and I'm glad to see Google offering an alternative.