@rysiek @YurkshireLad C'mon, take off the tinfoil hat for a moment.
The how is well understood - onioning. The tech is open source enough for the community to verify the default implementation. Assuming they trojan their binaries... well, I think they would get caught.
The more interesting takeaway, is Google don't feel the IP address info is all that valuable anymore. They are comfortable giving it up, they trust it will hurt their competitors more than it hurts them.