Companies don't have thoughts or emotions. A company's actions are a result of the individuals that make it up. When you see controversy like the China thing or military contracts, that's just how decisions get made in big companies. Someone wants to get money from the military. Some other people don't. They discuss it and the company makes a decision by individuals taking action. People inside Google that wanted to do military contracts heard the counterarguments and didn't carry on. That's all.
Maybe Larry Page thought "hey, this is bad for our brand" and fired all in charge. But that seems very unlikely. What seems likely to me is that the people that wanted to do the project heard the controversy and decided on their own that it wasn't a good idea.
As the company gets bigger, there are certainly more and more of these controversies. It does get hard to manage when you feel personally responsible for what others have done and your voice is not heard. That is why people are leaving.