This was an internal tool. How will a regression in that be "highly embarrassing ... to the company"?
When you do consider the content/context, then we need to consider that this vendor/partner (IRI) was likely offended by the implications and the relationship between Google and the vendor/partner was likely damaged.
IRI did the right thing in not publicly commenting on the issue, though, so we'll never know for sure what actual affect this incident had on that relationship.
That is a bad argument in this case, because a regression in an internal tool is not going to be "highly embarrassing to both the company and you."
This was not a "regression" in any sense.
I welcome any other argument on this topic. But the argument presented had a flaw that I was pointing out.
It happens.