This is because the "search with Google" feature is not actually provided by Terminal, it is a service[1] provided by Safari. Other browsers could easily provide their own service, but I haven't seen any that actually do.
You can see and configure all available services by going to the app menu in the menu bar and selecting Services -> Services Settings
Thanks, appreciate the info. Strange though that the services make zero mention of who is providing them.
And really Apple should have made a generic service using the default browser, rather than this being a Safari provided thing. I guess the OP's "edge of anti-consumer" theory has some merit.