I have the same problem, but it's selective on the application. I can do it in the browser (like right now) but when I try different apps, it won't work. I'll see the swipe trail on the keyboard, but no text prediction or anything is produced. Even manual typing won't produce predictions.
This is obviously a software bug that needs to be addressed. I don't mind if the keyboard is tiny, it makes swipping much easier, but this keyboard needs to be addressed.
I want to love this keyboard, and I praise to my friends house Surface it's awesome, but Google has got you beat. You need to open up development to using on screen 3rd party keyboards or something, because user input should be secondary to the user and not something we must adapt to.