I've always assumed a bean counter somewhere crunched the numbers and when you adjust for people who don't leave because of the stress of interviewing + friction of switching + uncertainty of new manager, it works out better for them to not do this.
It only works out because existing employees are squeezed of every drop of productivity, leading to them to quit. Ultimately, the end game for the hiring manager herself is to get poor ratings and quitting.
There's a reason why FIRE is so popular in tech industry. It is led by incompetent fools in positions of making arbitrary decisions without consequences, until it's too late to salvage anything.
