Bingo. In a high COL area, you have the option to retain a significant surplus of your exchanged labor if you trade off COL for inconvenience, which adds up to compounding gains over time. And as your thought experiment proves, the real move is to relocate after a substantial tranche of that money has been earned, at which point the lower earnings are no longer as much of an issue.
Another way I've been thinking about it over the past few days is that this also makes side project optionality significantly more attractive. If you can make a side project that makes XX% of your BigCo T1City pay, the point at which you're making top 50% percentile low COL MRR could become significantly lower than if you planned on remaining at that BigCo in BigCity forever.
I agree, but want to mention another variable that throws a wrench into things:
The longer it takes for one to accumulate that substantial tranche, the more entrenched they become in their home city (family, friends, community) and the more challenging it is to move.
Another way I've been thinking about it over the past few days is that this also makes side project optionality significantly more attractive. If you can make a side project that makes XX% of your BigCo T1City pay, the point at which you're making top 50% percentile low COL MRR could become significantly lower than if you planned on remaining at that BigCo in BigCity forever.