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The captcha itself (matching pictures to text) is mostly for ML training data. I think pass/fail is mostly based on heuristics like how you moved your mouse which could get analyzed before you complete the captcha. https://www.techradar.com/news/captcha-if-you-can-how-youve-...

reason why is 1. Google and others really needed the training data, and 2. it probably helped justify the cost of providing the captcha service for free worldwide (old free tier was 1M/mo)

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If Google determines you're an undesirable user, doing the captcha is just an exercise to waste your time.
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I certainly experienced this (the vicious try-again cycle) but curious if you have any sources for this?
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A person's testimony is a source. I can add mine: you can tell when you're truly blocked because if you click for the accessibility audio-based captcha it will actually tell you you're blocked (but, if you did the visual captcha, would simply loop forever while telling you you did it wrong).

I don't think you'll find an article by Google saying "yes, we sometimes completely block users while making it look like they're not blocked and wasting their time".

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That explains why I can never get past Google's captchas! I don't even automate Google searches, I wonder why they don't like me.
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Depending on the IP reputation as well as the kind of IP address you have, this can happen.

Google also prefers if you have a Google account logged in.

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