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According to this guide for setting up an HTTP(S) load balancer in GCP:

The client SSL session terminates at the load balancer. Sessions between the load balancer and the instance can either be HTTPS (recommended) or HTTP. If HTTPS, each instance must have a certificate.

From reading online about load balancers, the HTTPS -> LB -> HTTP setup is called SSL offloading, and is not an uncommon network configuration.

Why do the GCP docs recommend using an HTTPS connection to talk to compute instances? I cannot find any reason why this would be unsafe, as long as the compute instances only allow insecure HTTP communication with the load balancer.

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    Because you don't control the network between the instance and the load balancer. The traffic is unencrypted. If you're sending data that's important, it should be obvious why that's unsafe.
    – user143703
    Commented Aug 13, 2017 at 2:07

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As @user143703 mentioned as well, HTTPS is recommended to make sure keep the data is secure from end-to-end as in encrypted form even from load-balancer to backend servers.

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As @user143703 and @NSingh already mentioned, without re-encrypting the traffic between the LB and your web server, a Google Engineer can snoop in on your traffic and lift sensitive information from your HTTP traffic. So with that recommendation, Google protects itself from rogue employees.

You can use self-signed certificates for internal communication since web server spoofing is not much of a concern as you control the routing of the traffic.

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