The people who were scammed did not run rooted phones. Rooting your phone may allow you to install pirated applications containing malware. But most banking losses comes from scams where the user itself initiated a transaction.
These discussions aren't really about tech. They're all about politics. Libertarian societies grant freedom on the understanding that some people can't handle it and will hurt themselves (and maybe even others). Collectivist societies sacrifice freedom on the altar of socializing individual losses. The first example he gives is from the relatively collectivist UK, where "James" sent all his money to a foreign romance scammer despite being warned by his bank not to do it. The twist that the blog author doesn't mention is how the story ends: his family went crying to the BBC who kicked up a fuss and Lloyds decided to give him the amount he lost i.e. make other bank customers pay for his bad decisions.
This is a spectrum: you can't have a society that both grants maximal freedom and that also protects people from themselves.
As societies differ in how collectivist/libertarian/crime-ridden they are yet tech platforms are global, it's inevitable there will be disagreements about where on the spectrum this judgement call should fall. What Google is doing here is actually quite innovative and surprising for a company as historically woke as they are: they're admitting that the problem primarily affects some cultures/countries and not others, so the level of freedom should be different. The rules are being changed to only apply to phones in specific countries, whilst preserving freedoms for those in others. This is a very interesting decision that stands against a multi-decade trend in the tech world of treating every country and culture as if they are all identical.