The answer to almost all modern intellectual property cases involving the internet, or code, or a mixture of the two is emphatically "we have no clue".
The internet is sufficiently different from a newspaper or a bottle packaging plant that we're literally now "discovering" a whole new body of law as one might "discover" new physics or mathematics.
With that out of the way, here is my analysis:
I'm not sure the Australian precedents (Dockside, Tanzone) were in mind when Google was drafting this.
I'm much more confident that s 10.5 "Intellectual Property Restrictions" were put in place to create yet another source of liability, being in contract, for breach of Google's IP rights granted to them under the Berne Convention and its associated legislation. Basically, this is like coding in an assertion or unit test in. If the malicious user is able to avoid liability under statute, they will also have to defend a contractual claim by Google.
Finally, we come to s 10.5(f). Note how it is mixed in with other restrictions. This is because Google grants everyone this licence:
Google gives you a non-exclusive, worldwide, personal,
non-transferable, non-assignable, non-sublicensable, royalty-free
license to use the Service as provided by Google, in the manner
permitted by the Terms.
This is actually quite a broad licence (even though it looks very "qualified". I mean there are 9 qualifiers in that sentence alone which is almost ridiculous except it isn't for lawyers)
Due to this licence they have to explicitly limit your usage of it, such as creating "derivative works": s 10.5(b). There is US case law which gives the "new owner" rights over work if they apply even very "minor, but transformative" changes to the work. These are pretty good and funny examples: derivative works.
There is also the doctrine of trademark abandonment, which is probably what 10.5(f) is targeting. Basically you can completely lose your trademark (i.e. there is nothing to stop some enterprising litigant from asserting that you have abandoned your trademark) simply because your licensing was "uncontrolled": See Freecycle Sunnyvale v. Freecycle Network, 626 F.3d 509 (9th Cir. 2010) (Loss of Trademark Rights (US))
In summation, basically you have to think of it from Google's point of view: even though it sounds onerous or that "Google will always hold something over you for a free service", that's actually not the case. It's more like Google is frantically trying to protect itself from every known argument in every known court AND from all the new arguments that might arise, because I mean there is no legal doctrine regulating 10.5(d):
No caching or storage. You will not pre-fetch, cache, index, or store
any Content to be used outside the Service
I would be surprised if a judge even knew what pre-fetching or caching was in this context - but they could potentially be swayed by this as a "new and novel" argument. If you think it doesn't happen, one realllllly old Australian judge reckoned that "torrenting is not illegal because you do it in verrrrrrrry small chunks at a time": Roadshow v iiNet. I know. (Suffice it to say that precedent was overturned in a heartbeat)
So, to answer your question:
Does this mean everybody using the Google Maps API is in violation of
The answer is, until someone does something devious with the API, Google sues them and relies on 10.5(f) we will never know.
So long as you're doing something vanilla with it, you will likely not attract the mire of Google.
To address the Roadshow v iiNet comments below: it must be understood that the doctrinal analysis of the BitTorrent Network needs to be totally divorced from the actual facts and outcome of the iiNet litigation. While you can't say that usage of the BitTorrent network to infringe copyright is "insubstantial" merely because the chunk size is small it must equally be recognised that the iiNet litigation was an absolutely disgusting practice that both Village Roadshow and Voltage Pictures engaged in.
They were rightly refused remedy or given onerous ones. However, it is still theoretically infringement to use BitTorrent to exchange infringing material. As a modern society, though, we need to work towards a proper, fairer overall scheme to regulate intellectual proprietary reward and promote creative freedom.