Full disclosure: I'm a former Googler.
20% time varies widely across the company, and the ability for an engineer to take their 20% time isn't as sacrosanct as it once was. On many teams it's discretionary depending on current team load (though on the teams I was on, generally granted if only as a matter of maintaining morale). Not everyone has a 20% project all of the time.
People still have deadlines, but the amount of work you commit to doing for a particular deadline is scaled by people's availability - and that includes any 20% work.
It's generally not useful to think about project estimates as padding 20% extra time - because deadlines tend to be exogenous (holiday seasons, launch events, etc.) and less negotiable, and more as scope of work that can be committed to in a particular period, which is something you actually have control over.