Both start off. Google's consent screen is what actually grants Drive or Gmail. Skipping now still signs you in. You can connect sources later.
Documents, slides and PDFs from the folders you nominate after this step.
Indexed and searchable, from a date floor you set on the next screen.
Nothing leaves this app. Indexing happens against your account and the result is stored there. Turning a source off deletes its index rather than hiding it. The two switches here are a preview of intent. Google still asks for both scopes together and you choose on that screen.