The perception that they are able to run rings around Google is not necessarily an accurate one. There are tradeoffs in any engineering situation and GrapheneOS devs make different ones based on different requirements. Google is one of the reasons MTE even exists. I don't think GrapheneOS devs would be capable of helping push forward that technology in the same capacity.
Fair, and also Google is not a monolith. I’m sure that their own security experts who helped push things like MTE are also confused and frustrated by the lack of internal adoption.
A lot of heavy lifting is involved at the lower levels of security and Graphene doesn’t have to deal with this work, generally. I guess my surprise comes at the “fit and finish” stage where Google regularly seems to be lacking.
Do we know if Google is operating on the frontier of the trade-off curve? What do we lose from Pixel Android when GrapheneOS security changes are made?
Very little if anything at all. Depends a bit how you draw the line between an app and the base OS.
Contactless payments dont work with Google Pay - but that is due to Google using attestatiom to check if the OS is GMS lincesed (GrapheneOS is not).
There are alternative contactless payment options that work fine.
There's quite a list you can get even from GrapheneOS's posts - among other things, there's a rather large set of apps that will outright crash when MTE is enabled.