Not really a risk here, it would be impossible for that geohot kid to be any more cocky than he already is, in part due to silly articles like this one. We really have articles that follow his career path specifically? The team itself is interesting news, his personal moves are not.
Google doesn't play that way. It revels in demoralizing as a means of encouraging others to step of their game.
This is not Microsoft that got rid of their Peer Review system to make people feel good about things rather than pushing them to be individual contributors.
No, the label intern is so they can be rid of them when they are done with them, and to make sure that there is no doubts about which way trade secrets and IP flow. This is a way of saying "You can't build anything we don't own, and you can't learn anything from us that we don't authorize you to."
It seems mildly insulting that someone of his talent is a "paid intern" after winning a $150,000 prize although I'm sure the money is better than most people earn "full-time".
Ironically, no matter how hard Project Zero works we are probably all subject to the biggest security hole of all, a backdoor to US Government, that encompasses not only software but hardware components.
Is he in school? Then he probably asked to be an intern. Watson Ladd is an intern at Matasano this summer, despite being cryptographically more competent than any 2 other Matasano team members. Why? Because he asked to be an intern; he's in grad school, and presumably plans on being a professor in the long term.
Google isn't a bad place for a software security person to work. They have one of the best teams in the industry. It is very unlikely that they're trying to insult the guy.
At many tech companies, “intern” is just HR’s means of designating “someone who will be employed for a fixed time period before returning to university”, rather than a reflection of their skills or salary (even if most interns are relatively less experienced). I don’t know if this is the case at Google or not, but it wouldn’t surprise me.
Every intern I've worked with at Google was either a PhD candidate or post-doc at a prestigious institution. There's nothing wrong with being an intern and in many ways the fire-and-forget nature of their projects -- and total absence of career concerns, yak shaving, and red tape -- can lead to fine outcomes that aren't typical for full-time engineers.