Thank you for the information. We, Google Cloud Platform Support, do not have visibility on how the ISP routes traffic to Google Cloud Platform or vice versa. I assume if you are using a public IP on the GCE instance, traffic will be leaving GCE and routed through the Internet. As to explain, the ISP mentions Google Fiber, and it may not be necessarily routing traffic internally through Google Cloud platform.
To better understand this behavior, you may try the MTR tool on both the server (instance) and the client (local machine) as to compare routes and jitter for each hop, and for both Cloud platforms. The following additional articles and tools may also help with this approach [1] [2] [3] [4] [5].