The first sentence talks about INCOGNITO messages and the second about NON-INCOGNITO ones.
Yup, you're missing something : default setting.
By default, on Allo, every conversation is non-incognito. You need to explicitely jumps some (albeit small) hoops to gain privacy by accessing the incognito mode (it works the same as the various "incognito tabs", "porn mode tabs", etc. that have appeared on browsers).
For everyone else, Google's AI will mine the shit out of everything you say - "to help make the AI better by better knowing you, and thus giving you more relevant answers and auto-suggestions" (i.e.: being to target the shit out of you with all the deluge of on-line ads you're exposed to everywhere)
(not to mentions NSA's wet dream: your Google-AI's answers/suggestions could accidentally incriminate you).
By default, the end-to-end encryption in Silence Circle, WhatsApp or the OTR plugin in Pidgin/Adium/Jisti, etc.
kick in as soon as possible, and displays warning if anything fishy is happening.
Privacy is the default behaviour.
The companies use whisper (or the OTR devs for the latter), are not in a position where they could access your data.
I hope you notice the subtle difference.