The fact that you see location and personalization affects the search result doesn't actually mean that they perform a real search using the query that you are actually writing in your search bar.
One possible way (I'm not sure exactly how it works at google, but I can guess) is that the search result is computed in many steps, one of which searches the indices and generates a list of relevant results, which then are passed to a personalization layer which modifies (reorders, merges, trims) the index results and finally it's passed to a presentation layer which renders the html page (perhaps there are other layers too, irrelevant for this discussion).
So, the "instant" search would basically replace first layer, the actual search in the big indices with a precomputed search list for each phrase generated by search suggestions (or a cache of these, which is filled by actual searches if the element is not present). The personalization layer would be free to do things to that precomputed search results, incurring into smaller load because of several reasons: a) fewer users have personalization and on fewer b) personalization has to access less data, and the whole search retrieve functionality is more IO bound than cpu bound.
As for location, there could be one of these 'caches' per location.
I'm sure that they don't do any query "as you type" because the 'instant' page result is always the result of the first "search suggestion". Try to type "F#" (as user 'singular' suggested), the first suggestion is "f to c", and the search results are about temperature conversion.