ISIS is probably an extreme example, more recently there have been moves to brand many non-mainstream movements and groups "terrorist". For example, Antifa is considered by many to be a terrorist group and if Google were operating in Hong Kong they would likely have to view supporters of the Hong Kong protest as terrorist.
My concern with actions like this is that there is rarely a clear line between what is acceptable and what's not, instead decisions are made in a highly political manner either by companies themselves or more authoritarian governments. So the question I have here is whether Google is simply respecting and enforcing national laws against owning illegal terrorist materials or are they making their own decisions about what is and isn't terrorist material?
IMO this just touches on a wider problem that in many countries simply owning concern books without a good excuse is illegal. To be charitable I suspect Google doesn't have much of an option here. If the government has classified something as terrorist material, even if Google disagrees with them doing so, Google probably should still respect national laws on not allow that material to be stored, or worse, distributed on their platform.