Perhaps some people are content with their role. I know many engineers, who, by virtue of being productive, got themselves promoted into managing roles where they hardly ever write code.
Perhaps this system works because it allows "climbers" to proceed up the ranks, ensuring they don't become resentful, while ensuring productive engineers get to stay productive?
The problem is that up until recently there was an expectation that you climb or you don't belong. If you stayed at L4 for too many years they'd start to take a close look at you and consider you for... ejection.
They say that's not the case anymore. Entering year 7 without promo, so I'll let you know how it goes.
Perhaps this system works because it allows "climbers" to proceed up the ranks, ensuring they don't become resentful, while ensuring productive engineers get to stay productive?