Agreed. Google seem to be very siloed internally. That manifests itself in confusing narratives like pushing PWAs (web) and Instant Apps (Java) simultaneously,

Agreed. Google seem to be very siloed internally. That manifests itself in confusing narratives like pushing PWAs (web) and Instant Apps (Java) simultaneously, or supporting both Chrome OS and Android. So instead of asking how this is good for Google as a company, you have to look at whether it's good for a single project within Google. PWAs and AMP seem like the most likely candidates.