There is a separate policy than this one that affects every app, specifically:
Existing apps that don't target an API level within two years of the latest major Android version release will not be available to all users.
Currently, existing apps [...] must target API level 31 or above by August 31, 2023 [...]. Otherwise, they will stop being discoverable to all Google Play users whose devices run Android OS versions newer than your app’s target API level...
So basically, if you don't update your app after two years Google will stop showing it to anyone with a newer device than the target SDK dictates, effectively soft-delisting it from the Play Store, unless developers put in the effort to update to the latest SDK regularly.
"We are planning to do a release around Aug 26 with the SDK 33 related changes."
I am just guessing here, but when the new changes that include the SDK 33 changes is released, all we will need to do is create a new bundle to upload to Google Play .. correct?
I don't need advice on how to behave. I would like to make others aware that they should be prepared for such things (caused by Google's bad information policy).
As Google becomes more and more draconian it may become necessary to move to another platform for app distribution. There are literally dozens available and none have such long and restrictive conditions. I suggest you investigate other possibilies and dump Playstore.
If you want to make money or want to make your apps available to the widest possible audience, the Amazon App Store is almost irrelevant. After the "Amazon Underground" started temporarily and idiotically many years ago, the Amazon App Store could not recover from it either.
This is the message I received:
We've detected that your app is targeting an old version of Android. To provide users with a safe and secure experience, Google Play requires all apps to meet target API level requirements.
From August 31, 2023, if your target API level is not within 1 year of the latest Android release, you won't be able to update your app.
To continue making updates to your app, ensure your app targets Android 13 (API level 33).