The mirrorlist is a configuration file listing servers that updates can get pulled in from.
When a package update is installed that contains a configuration file, it will not overwrite the old file but be installed with a pacnew extension so that you can merge the files (like you did). It will keep complaining at you until you remove the pacnew file, which is fine to do after you have merged successfully.
The graphical issues are probably due to something else that happened during the update.
I think the Google as an identity provider example is misleading. The more common use case will be medium to small companies where several admins/developers need to login to various servers and where manually adding and revoking keys across these servers will be cumbersome.
As the other commenter said, in those cases, the organization would also deploy its own IDP.