[cmrdporcupine]

The latter. You transfer to where you want to go. There's an internal listing of open positions, but there's also word of mouth. Assuming the team has headcount and you get on with the manager, it's usually not hard, and doesn't take a lot of effort.

Yes, the first bit doing something you don't like might suck. But I like that Google conceives of software engineering positions as a broader discipline than "I'm a fullstack developer who uses XXX language and YYY framework"; that isn't going to be of any use to Google anyways. We generally build our own tools and have our own frameworks.

Does it put people off the hiring process? I'm sure. Luckily Google has lots of people to choose from.