Hi Guys,
Feel free to check out how I handled the situations in the tool and here are the answers to your questions.
1) Do Google automatically disable the extension making it unusable?
Answer - No, You have to fetch the license details of the current user. If the user is not signed in, you can make the request in interactive mode to open the signin window and in the response you will get the status - whether the license is expired or not by using accessLevel attribute in the result. Depending upon the value, you have to handle it in your code - Show some kind of dialog etc
2) Do the user keep the extension working but Google stops updates?
Answer - Again, It depends upon how you handle this situation. AFAIK updates are not stopped, the user will still receive the update.
3) Do Google does nothing ?
Answer - Google tells you the status like FreeTrial, time when the license was created so that you can calculate the amount of free trial left in your application etc. I think that's sufficient information to take further actions in your code.
One of the things which I wan Google to improve is they should provide an easy mechanism to upgrade right within the application. I think right now, user has to upgrade via chrome store.
Let me know if something is not clear.
Thanks
-Sachin