Since Play is a system app, will it know my through IP even if I use a VPN? For that matter, wont my OS always know my true IP if I use a VPN, so unless I use a completely open source one it's probably leaking to Android or Windows for example?
Yes they will, if they care to.
Thanks to the total control on the device, they will know your devices innermost secrets and any of your secrets that you store on your device. The only possible exception is what happens in the baseband code (most baseband code is, I think, not part of Android). VPN functionality is outside baseband code.
Given Google's business model, I would imagine that they would care to (if not now, at some point).
When we choose a device and an OS, we implicitly "trust" the vendors of the device, key device-components, the OS and key OS-components.
Aside: It's not something I care to ruminate about since it rarely ever boosts my spirits. :)