Because in that hypothetical situation, the company can hire those individuals at $150K and $100K respectively. Sally won't accept $100K given alternatives in the Bay Area and her unwillingness to move to $MIDWEST_CITY. And to Bob--who is very happy in his less crowded and expensive location--$100K looks pretty good, especially relative to local alternatives.

"Shouldn't" has very little to do with salary offers.

So clearly sally is not worth being hired, all things bein equal. It wouldn’t make sense for the company

If all things are absolutely equal other than Salary, the company only needs one person, and Bob will take the offer for $50K less--then, yes, they'll probably hire Bob. By virtue of having an expensive lifestyle--and, presumably, more local options--Sally has priced herself out of remote work for companies that genuinely don't care where employees are located.

Of course, real life is more complicated than that and all things are rarely equal.

ADDED: GitLab actually explicitly states: "All things being equal, we will hire people in lower cost markets vs. higher cost markets."

Sally might not have a more expensive lifestyle than Bob, but might be aware that a similar company is willing to pay $150k. And therefore not accept the offer of $100k.

Not a remote one playing by "everyone region has same pay-rate". Because if there is another one and paying more, then Bob, would also apply there.

I understand why it happens, I was replying to a post that says “everyone should earn the same”, which I disagree with.

I agree with this sentiment. Even having children is a personal choice, which one may choose to forgo in the interest of saving money for example. On the opposite end of the spectrum, you wouldn't expect to pay someone more simply because they choose to have 5 children and their family living costs are higher.