I think part of this is because of company/domain knowledge. It may not be that the person is necessarily "senior" level generic technological talent, but they have built up deep knowledge of the companies systems to become a key part of the team's brain trust. I feel like I see this leading to title advancement just as much as technical aptitude. The flipside is that it is somewhat specific to the exact employer, but it should signal ability and willingness to become an expert of the company's product domain. A lot of times I think that is more valuable than raw technical ability anyway, but it's harder to interview for.