Its great that Google wants all the lines carrying data from their servers to be secure and tamper proof. It would be interesting to see if they ever support end to end encryption which would lock them out of scanning the data as well.
Then how would searching your mail work? That breaks the product on a fundamental level and makes it worse than all competing products for all but a few users with specific needs. The existing end-to-end browser extension is a reasonable compromise.
It would work in the same way as opening any encrypted mailbox works. Your password is used as the key to decrypt your mailbox when you login. The same key could also be used to search the email.
Right now they're already telling you that they scan every email. So yeah, you would have to trust them that they do in-fact discard they keys and don't allow decryption in other scenarios. But large companies with tons of cash to lose if they're sued, will rarely blatantly lie about what they're doing.
