Edit: Even without giving it context, at best, just get a single picture and two paragraphs. Maybe they are slowly rolling the feature out. It doesn't seem to get it.

That's... uh... a pretty bold description for a tool where you are in fact outsourcing the "imagination" part to the machine.

Obviously Gemini doesn't know that "music truck" is another name for "ice cream truck", but more concerningly, the illustrations it made for the trucks were this kind of eldritch amalgamation of Cars-movie style cars and people driving cars. The story was just OK, I don't think it would have kept my toddler's attention for the whole ten pages. Plus, the mailman is barely involved.

Imagine the meetings where they decide to add personal illustrated storybooks before fixing chat histories

It created a 10 page story that stuck to the topic and was overall coherent. The main character changed color and style on every page, so no consistency there. The overall page layouts and animation style were reasonably consistent.

The metaphor it used was the character climbing a mountain and encountering other characters that represented each mode. Each supporting character was reasonably unique, although note motif was present on 3 or 4. The mountain also changed significantly and the character was frequently back at the bottom. However, in the end, he does reach the summit.

I can't say I am overly impressed but it does mostly do what they claim.

Is there something lost, when it's not the adult telling the child a bedtime improv story? (IME, kids love this.)

Is something else gained by the generated storybook?