Denny seems to be leaving Google and joining Wikimedia Foundation to lead the project this month, so probably you do not need to worry too much about Denny's affiliation with Google.
initial state: num_islands=1; num_lakes=V
final state: num_islands=F; num_lakes=1
how state changes: Each time a saddle sinks, either two lakes are joined (num_lakes--) or an island is split (num_islands++)