Unless you found one of those rare teams that stays together for the long haul, but the experience with such a special phenomenon should make it more than worth your while.
If L4s are not getting opportunity to lead, they are on a sinking ship anyway and the smart ones are LeetCoding.
(Obviously this all reflects the crazy economic moment of the last 10 years in Silicon Valley, but so does the level system you're critiquing).
Teams do not expand until infinity. In fact, it is often better for teams to not expand.
If you are expected to be leader after two years, because the teams are expanding regardless of whether more people are needed and because everyone else is fresh new, then there is issue with managemet
I don’t expect that to last forever, but it’s the context that this system is built for.
It's just impossible for everyone in a company to be a team lead, so not everyone can become that to become an L5.
Which leaves the other option, to become an L5, which is to be an "exceptionally strong individual contributor" and being that "on an ongoing basis". Not everyone in a company can be an "exceptionally" strong person, otherwise it wouldn't be exceptional any longer.
You're saying the expectation was to either become L5 or get out. So now we have all these PhDs and super achievers working at Google, but only some of them can be exceptional vs. the others.
You were exceptional vs. regular people and made it to L5. Now comes in a super achieving PhD that's a tad better than you and now he's exceptional. You are no longer exceptional. You're just an average super achiever. So get the eff off Google's lawn. Stack ranking completed.