The guy who was the maintainer of Google Calculator from 2005 to 2007 confirmed that this is the correct explanation. He said he wanted to switch it to use bignums, but wasn't able to (and not due to technical reasons).

ZorbaTHut (http://mandible.net) said:

  it's 80-bit ieee floats internally, but there's some specialized code
  to clamp it to zero when it looks like it ought to be zero.
  as far as I know it should otherwise behave exactly like 80-bit ieee
  (it wouldn't surprise me if the clamping code is being a little overzealous
  in this case)