Manifest v2 is being deprecated while Google ask Google Identity Services to be used on Manifest v2 only

Question

First thanks to all SO members for growing the coder inside me that I am able to articulate my thoughts only after doing some homework on my own.

Query: This seems like a contradictory statement from Google. In Identity Platform related Documentation, Google asks you to use Manifest V2 as V3 does not support Identity Services. So I decided to use switch to V2 to my Chrome Extension which I was earlier build and published as V3. But then got error when tried to run Unpacked Extension:

and this is what official documentation asking to degrade to V2:

https://cloud.google.com/identity-platform/docs/web/chrome-extension

Important: Identity Platform supports only extensions that use Manifest V2. Manifest V3 isn't supported because it doesn't provide pop-up operations.

Update : adding Manifest v3:

   {
  "manifest_version": 3,
  "name": "hirall",
  "description": "Getting Profiles for Insight",
  "version": "0.0.0.1",
  "homepage_url":
    "https://www.example.com",
  "author": "example",
  "permissions": ["activeTab", "scripting", "storage"],
  "host_permissions": ["https://*/*"],
  "background": {
    "service_worker": "background.js"
  },
  "content_security_policy": {
    "extension_pages": "script-src 'self'; object-src 'self';",
    "sandbox": "sandbox allow-scripts allow-forms allow-popups allow-modals; script-src 'self' 'unsafe-inline' 'unsafe-eval'; child-src 'self';"
  },
  "content_scripts": [
    {
      "matches": ["https://*/*"],
      "js": ["hit.js"],
      "css": ["assets/style.css"],
      "run_at": "document_end"
    }
  ],
  "icons": {
    "16": "assets/icon-16.png",
    "48": "assets/icon-48.png",
    "128": "assets/icon-128.png"
  },
  "action": {
    "default_popup": "result.html",
    "default_icon": "assets/icon-16.png"
  }
}