And after law enforcement cleared the guy, was it also Google's responsibility to ban him forever based on their own mistake?

I'd disagree. The rules seem to be either that you moderate and you're on the hook, or you don't and you're not, and you just need to respond to reported abuse. I personally think it would be better if Google acted like a blind medium; like a mailman. We've seen targeted abuse by employees to others they know, and we've seen anonymous, non-targeted abuse through application of policy, like here, and in all cases, because Google has pioneered a cutting edge zero-support system and also employs a large pile of lawyers, there is absolutely no recourse to be had unless you're famous on twitter or know a Google employee.