This is not how it works in practice. In reality a "v-team" is made up of "vendors" who are not full-time employees but unlike agency temps they don't have a limit on how long they can work at Microsoft without a break. They do very much work on campus, though often they tend not to have their own offices (instead they work in bays or are doubled up with others).

Yes, exactly. "v-team" is Microsoft-speak for a virtual team, most often a subset of people in a larger team who do not all report to the same lower-level manager. If you have a team of 12 people, then select 4 of them to deal with issues in the product's installation and set-up, you might call them "the setup v-team".

Not to be confused with "v dash", which refers to a contract employee from a vendor. In the Microsoft email system, contractors have an email that begins with "v-" and temps/interns have an email that begins with "t-", and just as employees are sometimes referred to by their abbreviated email aliases, contractors and interns as a group are referred to as "v dash" or "t dash".

Now you know... although I doubt you'll ever need to know :)