By that, it was meant that the code would be merged from the separate Cupcake branch to the master branch. This was actually completed a few days ago -- ahead of the original schedule.
I have not been following it very closely, but I wonder how much of the reason there was a "private" branch was to give the perception of a stable, non-changing code-base, like nearly every other phone platform has at release, to get more people on board, but without locking up development in the meantime so that further progress couldn't happen. I can completely see a reason for doing this that is social/political considering the history behind handset development and release.
Google is doing Open Source wrong.