Their backup system does handle app data, but only if the app does not opt out of it. Which is an incredibly stupid system. It’s my phone, if I tell it to backup up my data it better back up everything. I don’t care if some banking app which thinks it’s too good to be backed up.

However, as a long time rooted phone user I know that the rooting community is always 2 steps ahead of Google so most likely nothing will change.