Incognito mode is a standard browser feature, there is no reason to believe that Googles browser would work differently than others browsers. Safari calls it "Private Browsing", should that also be illegal since Apple still tracks you on websites you visit even if you have it on? It is insane to assume that every company that has a browser with this feature would sync it with all their website to disable tracking when it is on.
And often times that wouldn't even be what you want. Often you go incognito to log into another account because it creates a fresh browser instance. Doing that would be impossible if it didn't enable any form of tracking, logging in requires them to track you. Making a sensible way where incognito somehow prevented all tracking while still being functional isn't possible.
I didn't imply that a clear and ethical implementation of privacy features (or "tracking users" as what you were previously referring to) in general is now seen as strange; My point is why would should that implementation of not tracking users only apply to Google? Having it only apply to Google and its services would be strange, and just as confusing to users as the current situation you're expressing frustration about.
In your model are you satisfied with Google still applying its tracking techniques to Microsoft Edge users in Microsoft's incognito mode?
And often times that wouldn't even be what you want. Often you go incognito to log into another account because it creates a fresh browser instance. Doing that would be impossible if it didn't enable any form of tracking, logging in requires them to track you. Making a sensible way where incognito somehow prevented all tracking while still being functional isn't possible.