You practically answered your own question already:
To force Google to display a page specific to a certain country you have to use a host that can send requests via IP ranges or providers that Google recognizes as being from that country. Proxies provide exactly that functionality.
Yes, you are right, developers or others in charge of testing Google services will likely not use proxies, though for a company that big providing a few test hosts in every country they operate in doesn't seem to be that big of a hassle.
If I had to implement a multinational service that provides content based on the location of the client I'd not try to obscure (as in security by obscurity) testing functionality by hiding it behind undocumented parameters. The cleaner and more obvious implementation of such a feature would be account-based functionalities.
- You are an ordinary user: I'll deliver content based on your location.
- You are signed in and the "Testers at Google" group: You see a setting to sort of "spoof" your location.
Actually, all systems I develop do feature extended debugging and testing functionalities, even on live hosts, but those features are never enabled or accessible to users at all. After all, that's what user groups are for.