Yes, PM to me stands for product _management_ so management issue. Same for engineering - it doesn't mean just individual contributors, there's someone managing the engineering as well.
The context of the comment chain is Google failing to get product out the door before the competition based upon research results. Sounds like backend management is finding things and product management failing to capitalize was their point.
Not always. For example if bringing a new product to market has the perception it might eat into existing revenue then all sorts of managment shenanigans will likely happen at most big orgs.