Earlier quoted context omitted.
Google does many hundreds (if not thousands) of these a week, and this false-negative is an unfortunate casualty of the process. Yes, and it's worth remembering that Google are the unfortunate casualty here. Being rejected as a false negative sucks as a candidate, but ultimately there are plenty more developer jobs around if you're actually good. As a business rejecting the right person could cost hundreds of million…
Google believes the opposite, that hiring the wrong person could cost that if they have a negative impact on the teams they work in so they prefer false negatives over false positives.
It is true that hiring a security risk could be more damaging than rejecting a super talent, but all companies have systems in place that should reduce impact of incompetence and manage out inadevertantly hired incompetent people, because no hiring proccess is perfect.
So about rejecting a super talent to avoid hiring an incompetent person. It seems that statistically, a minority of people produce a majority of the value. Google hires in bulk, and I doubt their Cal Tech manufactured Mc Engineers are all elite people, so I'd guess they have the same problem as anyone else.
That problem is hunting for these people who will drive your buisness forward. Like YC and startups, you need to hire a bunch of bad bets for the big payoff.