> If Google had never attempted a game studio and launched Stadia as a standalone platform (as it will now be), no one would have said "ok but it's a bad sign that Google isn't getting into the game development business"

Throwing money at a first party studio was a sign of investment and dedication, though. Had they thrown the money at something else - like developer outreach - sure, that would have been fine. I don't see that as the likely alternate reality had they chosen not to open a studio.