According to the message, it reads, “Hangouts will improve quality for future calls by routing audio and video over a direct, peer-to-peer connection, when possible.” As it stands, Google routes calls through their servers whenever you use Hangouts to make voice calls. We suppose on one hand it might be more secure, but at the same time it could potentially degrade quality of the call.
However as pointed out by 9to5Google, by using a peer-to-peer connection, it will reveal the IP addresses of both parties, although there isn’t a way to reveal said IP via the Hangouts UI. If you are using voice calls to make calls to friends or family, we suppose this might not necessarily be a big deal, but if you are making calls to strangers then you might want to be wary.
It is unclear if this will only work if users call from Android app to Android app, or if the desktop to Android app and vice versa will see similar call quality improvements, but this is still an improvement Hangouts users can look forward to.