I've definitely seen this from time to time. I used to work for an ISP and we would occasionally, in the office, get "Your system is sending too many automated requests" from Google. Usually one of our customers had gone off the rails with some sort of amateur scraping, but this was always a pain to debug. I think we talked with Google's NOC and just had our rate limit increased or something like that.

Do you see the challenge and then you're able to pass? Or does the challenge loop forever?

I see the challenge almost always and most of the time it passes after I manually interact with it but I'll get a looping challenge every once in a while and it persists until I change VPN servers.

I don't think I've seen it for a week or two now but I've certainly encountered it in the past for spans where it'd occur at a frequency of maybe once every two or three days and then go away for a while.