As a Googler, this sounds a little over-sensationalized to me (mostly because of the choice of quotes), but I bet there was some unpleasant sausage-making going on as well.
First of all, the quote from Jack Menzel about figuring out home and work locations sounds 1) about typical for him and 2) exactly correct. If Google is giving you directions and popping up traffic along your route between home and work every day, it's pretty clear what's going on. There's nothing weird or unexpected going on there.
Second, the settings thing. I see this as two issues: one, multiple settings, and two, making the settings hard to find. For the first, both search and maps had their own settings (web whatever vs location/location history), and they didn't talk to each other. I'm sure the relevant VPs talked about relevant VP-things, which probably did not include the config page. Both were sure they had an option to turn location off (for their project), so that box was checked, and done. Yes, someone should have made sure there was a single button, not three, but the org chart was shipped instead.
The hard-to-find thing is harder. I, as a regular schlub engineer, think that sounds pretty sleazy, but I have no idea how true it is. If someone's A/B test said, oh user engagement was down on this arm, I can see that happening. It'd be a failure, but I can see that happening.
I guess at my level, it seems like all the people I'm working with take user privacy really seriously. If someone wants their data deleted, we go through a lot of hoops to make sure it's really gone. Any feature using user-data gets a privacy review and usually ends up requiring pretty strict differential privacy bounds.
This is a little unfair and possibly just ignorant, but my impression is that Google is far better at protecting user location info than the telecoms, who have more complete data from cell-tower triangulation and who are generally willing to sell that data to whoever, and yet they get a lot less attention for it.