What are organizations in GCP used for?

Organizations in GCP are used to group resources - not to federate identities (e.g. AWS Control Tower).

You can connect VPCs in two different organizations - using either Cloud VPN or VPC Peering. Cloud VPN would require internet traversal.

When does google create the top level Organization Node?

This is created when you sign up for google workspace with your corporate Domain. This is NOT created when you create and login to the console of your GCP account. However, once you enable Cloud Identity, you can create an organization node.