Of course they were aware of the issue, if you read what JBQ wrote, he mentioned this was escalated 6 months ago. It doesn't take a leap of the imagination to conclude that the expectation was the issue would be resolved by the time the product was available for sale. Perhaps Qualcomm even stringed them along (I'm speculating)
JBQ says he's very frustrated with the "lawyers", for what exact reasons- I don't know. Maybe he feels like they are not exerting enough pressure, or maybe it's Qualcomm's lawyers he's pissed at. You cannot say Google (or at least JBQ) knew how this would turn out.
no video device support (which means you can't even boot to the Android home screen) for the new Nexus 7
Google was aware of all of these issues and still made the hardware choices they did. They could have chosen differently.
These are flagship Google devices; my expectations are (I think rightfully) different for those than some random device.