I agree it would be silly to expect companies to do everything themselves, but the example was of contractors (recruiter in this case) doing similar work to and under the direction and control of a full-time employee, at the Google facility, for a long time (1 year). This is where labor laws come into play and why companies restrict temps from working long term. Just putting a contractor on a 3rd party's W2 doesn't mean you're free to do as you wish.
Now, if they took the entire recruiting work for that team and gave it to the outsourcing agency who did the job from their Florida office, it wouldn't be a problem. They could also do what Apple does and host all the contractors in a separate building with no contact with Apple employees https://www.bloomberg.com/news/features/2019-02-11/apple-bla... but the optics of that isn't great either.