It does also say: "Google worked with a subset of its new HTC hires on a contract basis for the Pixel and Pixel 2".

This suggests they at least partially outsourced the work initially and then acqui-hired their way into in-housing it.

Though, yes, it is possible that some of it was done in-house from the beginning. Just because they leaned on external resources to some extent doesn't mean they developed no internal capability on their own.