This story is not about Google. It's about Google's contractors. Please reread the story and the article title.

You said "It's common knowledge in the software industry that the best way to advance is to hop jobs every two or so years".

That works out when you start for startups, but if you want to make more than 250k, you're going to need to get promotions. The companies that pay more than that like google aren't going to hire someone into a L5 or above role that has jobbed hopped every two years without getting any promotions to an L5 or above level role at similar companies who also won't hire you at that level. There are routinely stories about people with 15+ years of experience getting hired as L4s because of this.

There are obviously exceptions especially if you write a really popular open source library but this generally holds.