That's a cultural thing in the company I work for (or maybe broader in Germany, dunno), where some people think that if they start to negotiate, they might lowball candidates, and then they leave after half a year or so.

We try to hire more long term (we aim for 5+ years retention), dunno if that's related, or if there is any evidence to back this procedure.

I find it a bit weird myself, which is why as a candidate I'd like to know about it :-)

As an employee I found a nice hack around that. The employer made an offer and I made a counter offer, the employer said he couldn't meet it and I explicitly told him it was negotiable. He thought about it for a couple days and found a way to hack his system to give me more and I got something around the middle of our offers. We both ended up happy in the end, I'm still there.

Right.

It's better to offer the candidate what the company is prepared to offer, both in terms of position and compensation. Let the candidate decline. At least some candidates will like the company enough to try working their way back up.

Though I'm sure acceptance rate is in some KPI, so there could be some bureaucratic nonsense involved.