seems slow. Having to flush on every swap, I mean. I wonder if there wont be a move away from offering these kinds of offers: if offering 0.2 of a core means putting in 0.3 effort, that's a 20-30% drop in how many you can run per core.
GCE uses KVM, which defaults to the linux scheduler with time slices from 0.75ms to 6ms, so the extra impact should be negligible. It's possible they tuned it weirdly, but I can't think of any reason to do so.
Flushes that occur from hypervisor calls could possibly have an impact, but those will happen whether you share a CPU or not.