The way it works is that when devices are folded, they look like regular smartphones, but when you open them up, there's a larger screen. The idea is to seamlessly transfer the contents of the smaller screen onto the larger one.
The good news is that most Android apps are already optimized for different screen sizes, resolutions, and aspect ratios. After all, Android is a very diverse ecosystem that ranges from low-end phones with low screen resolutions to flagship phones that are QHD. There are aspect ratios from 4:3 to 19.5:9, and screen sizes that go from a few inches to the size of a desktop PC.
But native support is something that's meant to prevent fragmentation. If this doesn't happen, then OEMs will have to create their own implementations, which could result in different experiences across the board. We've seen this before, with fingerprint sensors and screen notches, both of which started appearing before there was native support in the OS.
Google didn't say when the feature will arrive, but it will presumably be soon, as foldable devices aren't far away now.