This change doesn’t mean we’re indexing individual passages independently of pages. We’re still indexing pages and considering info about entire pages for ranking. But now we can also consider passages from pages as an additional ranking factor….

— Google SearchLiaison (@searchliaison) October 20, 2020

Google's Danny Sullivan confirmed this in another tweet:

Because people thought we were doing this in addition to indexing pages, so we want to be extra clear. Which we thought was extra clear. But....

We are not indexing passages. Period.

— Danny Sullivan (@dannysullivan) October 20, 2020

This change is not live yet. Although Google can do this, it has not been integrated into the current algorithm yet.

Google's Danny Sullivan also said on Twitter that passage indexing is not the same as featured snippets:

Featured snippet are used for voice search. They are already identified using different systems than passages.

— Danny Sullivan (@dannysullivan) October 21, 2020

Featured snippets show the most relevant part of a page that Google found relevant to a query. Passage indexing shows content that is relevant to a query even if the full page is not relevant to the query.