Google records chat by default. But it appears they had a policy if they were going to discuss something that could look bad if subpoenaed that chat recording should be turned off before discussing it.
No, this is not true. By default, starting a private chat with another employee defaulted to “history off” (as far as I can remember; I left Google >1 year ago now).
Right, but I'm not clear, is that actually illegal? I've seen similar policies at many companies.
They were under order from the court to preserve communications, and changed their corporate policy to use channels that auto-deleted communications when talking about things that they might not want the court to see.