The inability to draw diagrams and pictures that can't easily be created through adding shapes has held google apps back for some subjects. This change will allow students to not just create diagrams, complete brainstorms and in general take hand written notes if they chose but it may also help those subjects like Science and Maths that use subscripts and superscripts in equations. Students will also be able to show their workings for mathematical and science equations.
This is a very similar type of software that will most likely be seen in some external digital examinations in coming years (starting for some subjects in 2018 - majority by 2020). So it is great for our students to be able to become familiar with this style of working prior to digital examinations. While at this stage it is only available to those on mobile devices and not laptops, I am sure google will be working hard on rolling it out on laptops as well.
The gif (animated image) below shows this in action through a google classroom assignment.