Starting in late-2018, all new and updated apps will be required to target an SDK that is no more than 1 year older than the current codename release.
For example, following the release of Android P, developers will only be able to publish apps targeting Android 8.0 Oreo (API 26) or above. With the release of Android Q in the following year, the new minimum target API level will become P (likely API 28), and so on.
Do they understand the full implications that policy will have?
I don’t think so. They’re isolated techies living in a bubble.
Meanwhile, in the real world, if you’re someone who has to buy a pre-paid phone from Tracfone, Verizon, AT&T, or another provider, you’ll find the available Android phones have ancient versions of that OS. Really, you’d be lucky to find something with Android 6.x on it. Most are 5 or even 4! The borrowed Asus craptab I was using — which came from AT&T — had Android 5.x on it.
And none of those devices ever get Android OS updates.
So Google will be cutting off apps to a huge swath of Android users.
They’ll also be obsoleting tens of millions of phones and tablets.
Don’t be fooled by this:
Apps that aren’t receiving updates will be left alone, at least for now. The new requirements only apply when updates are sent to the Play Store, so nothing will happen to existing APKs if a developer takes a very long time to release an update or abandons an app entirely.
At some point, the overhead of just storing all of those old apps will be too much of a burden. They’ll get the heave-ho.
I think the Internet Archive is going to have to get hella busy and start preserving older versions of Android apps. Which will be a hell of a thing to undertake. We’ve already seen wave after wave of Android apps infected with malware of one kind or another. How can the Internet Archive ever guarantee something is malware-free?
Mike Cane's Atomic Supermen 
According to the linked article, this doesn’t prevent an app from supporting older Android versions, this just means they need to use a newer SDK. Target version and min version are different. It’s like how on Palm OS, you could use SDK 5.3 to build apps that would run on 2.0, as long as you didn’t use newer APIs.
Thanks for the clarification.