"We also saw in Google chrome that magic keyword transformations sometimes jumped incognito sessions, meaning that if you started a new incognito mode, got a transformation, then shut it down and started a new incognito mode you could sometimes see the same transformation again (without searching for the same magic keyword again). This weird behavior was not reproducible in Firefox's private browsing mode."
If that is FUD, that is some pretty damn creepy FUD.
Yeah, that jumped out at me as well, and actually seems somewhat irresponsible without more data (like a log of actual http traffic).
AFAIK (when I last checked), Chrome keeps no data between incognito sessions. If data is being kept, it should be extremely easy to spot and a bug should be filed. "This weird thing happened" isn't really a sufficient response to that theory.
If there isn't data being kept and transmitted, it means either the testers left open an incognito tab or something without noticing (easier to do than with private browsing, since private browsing closes all non-private browsing tabs until private browsing is over), or that google is tweaking results based on search history saved server side by ip address (and maybe other id-able browser characteristics), but only if the browser identifies itself as Chrome, not e.g. Firefox. There doesn't seem to be any real advantage there (and you'll likely just end up polluting anything but the coarsest of clustering), but that's just speculation.
I'm not able to reproduce the behavior in Chrome (though I'm having trouble reproducing even simple magic keyword behavior in incognito mode in the first place), so more data would be appreciated.
If that is FUD, that is some pretty damn creepy FUD.