We've all (externally) seen Google do extremely dodgy shit over the years, claiming the whole time "it's legal, we're fully compliant with all needed legislation".

The internal legal guidance they've been getting for this case is likely exactly the same as their internal legal guidance for everything else.

eg "completely full of shit" that they're complying with things

Seems like a bad internal culture, maybe stemming from their weird self belief and exceptionalism because "we're smarter than everyone else"?

Either way, when Google claims things like "We're fully compliant with GDPR, or [other legislation/requirements here]", the documented examples above is why many people don't believe them in the slightest.