I guess it's team or role dependent. When I interviewed with Google the first time I was directly told that there would be no 20% time (my memory is hazy but I was interviewing for something related to AdWords Fraud at the time). And this was back in 2005, when the media was actually glowing about Google's 20% time policy. The interviewer joked, "Sure you get 20%. On Sunday you can do whatever you want."

So I suspect that if people are picking up on the "curtailed 20%", it's because Google employees are telling people that it is during the actual interview process.