I work at Google. The hiring bar is definitely high, but the quotas are also definitely just guidelines. (I was hired during a hiring freeze, for example.)
I've previously worked at 2 startups, founded 1, and also interned at a large and a mid-size company. None of them had quotas. The two startups were very constrained in the number of acceptable candidates, but the internships had a fairly large pool of candidates to choose from, and would make a position for a suitably-qualified candidate if one did not exist.
I think we are saying basically the same thing in other words.
If the hiring bar is very high, it can be set high enough so as to limit the number of people you hire. So you end up hiring only (ones you think are) the very best.
The fact remains that even in such a "quotaless" situation, if you saw 1,000 amazing people you would not hire them all for your 10 person startup. That would be lunacy. In fact you would stop interviewing after hiring a tiny fraction.
The point here is that, contrary to the discussion before, it isn't that there is a "near-infinite" amount of candidates of equal talent. All companies want to hire the best, and the right amount of them within some reasonable range.
So it isn't that you can pick a criterion like "we will hire only left-handed people" without that having an effect, since left-handedness is only about 10% of the population (of all coder skill levels). If you start looking at far fewer candidates, you will miss some of the very best that otherwise you would want to hire.
I've previously worked at 2 startups, founded 1, and also interned at a large and a mid-size company. None of them had quotas. The two startups were very constrained in the number of acceptable candidates, but the internships had a fairly large pool of candidates to choose from, and would make a position for a suitably-qualified candidate if one did not exist.