I suspect it's not an insignificant factor in California being disproportionately represented when it comes to invention and innovation over the last half century or so.
That "100% your own resources" part is key, Microsoft provides a lot of free software. Employees working on their own projects have a "clean" setup that has never touched anything provided by Microsoft. Desktop/laptop, accessories, mobile phones, and so forth.
Heck Microsoft has on occasion promoted apps and tools made by its employees on their own time.
That other companies aren't like this confuses me.
There are rules against working on products that directly complete with existing Microsoft products, for obvious reasons, but aside from that, there aren't any real constraints.
(I've had plenty of friends at MS working on side projects that pulled in anywhere from hundreds to thousands a month, those projects tended to be written against MS technology stacks and made the MS Ecosystem better by their existence, why in the world wouldn't Microsoft want that to happen?)
As far as I know there are two differences.
a) Google claims ownership of things you produced off-hours with no company resources if the work you were doing off-hours is your job. If you are for example a DL theorist, you are being paid in part for your general skill at coming up with DL theories, not just for the hours you put in at the office. If you come up with a new DL theory in the shower instead of at your desk, Google still owns it.
b) Google claims ownership of innovations made by employees off-hours with no company resources if the innovations in question were already being researched elsewhere at Google or the innovation was already known to Google. Like any sufficiently large technology company, Google has made patentable discoveries that it has elected not to patent so as to maintain them as internal trade secrets. This is to avoid the mess that would ensue if an employee independently came up with one of these discoveries and filed a patent for it and Google had to dispute the patent by demonstrating prior art and in the process revealing their trade secret.
So if you have a new innovation that was produced off-hours and without company resources, you first submit it to Google's legal office and they will let you know whether they (a) consider it part of your job or (b) were already aware of it, and if so they will claim ownership. If you disagree with their decision there's a third party arbitration process so that you can hash it out without risking the exposure of a trade secret.
Friends have lost jobs at companies whose names you would recognize. eg M worked part-time as a sound tech in his own recording studio and his software job would mean they owned the rights to that work. M refused to sign the updated contract and ending up leaving the company over it.