Disagreements on which company owns the IP generated by the employee might end up costing both companies more than the value the employee generates. Legal costs quite a bit.

Another consideration, if this person is able to complete their work in half the time then this person was brought on at a responsibility level that was too low. Theoretically, the job should be taking 40 hours. It's the company's responsibility to load balance the tasks for their employee's to fill an FTE's schedule.

This happens all the time though. Also no one is writing code 40 hours a week.

Who on earth has the ability to do that?

A point to keep in mind, tasks does not necessarily equate to writing code. Think for example, writing a design doc, responding to email, or reviewing any kind of metrics. If this person was hired as a manager or a technical lead then the person might be doing non-code work.

Why does it matter if you can get your job done faster? Are you being paid for your time or your work? Seems reasonable to take an easier job than you are qualified for if you want to have free time. Who is losing?

A tech employee is being paid for their work. The company assesses the employee's ability and dictates the level, which determines how much work they believe the employee can handle in a typical 40 work week. The balance a company hedges against is the company paying overtime for overestimation of the employee's ability, or under utilizing the resource i.e. the employee.

Generally, if you want to work less it's an option to take an easier job. However, in this instance it seems a severe underutilization to pay a tech salary (40hrs) for potentially (55/2)hrs of work. The company isn't getting it's due, and likely the employee isn't either.

It doesn't matter if its underutilization if they are being paid market rate for the amount of work they are doing. It's a fair trade.

I wonder if it would be considered "bad" if one of the jobs didn't produce IP (code) and the other one did. Or if both didn't produce IP. Or if the companies were not direct competitors.

If I had some "marketing manager" title at Facebook, why couldn't I also do the same work at Chase Bank or some other non-competitor, if both were willing to hire me on a WFH basis? What ethical line does that really cross?

It's an interesting consideration. This would be a great time for any lawyer to chime in.

Personally I'd think it a matter of taste or etiquette. If I were a full time employee (FTE) at one company, working for another company would personally be a bit of a betrayal of my first employer.

Taking pay with the understanding that it's hard to be fully productive during covid, while going to work at a competitor, is sus. Firing may be coming soon, perhaps with lawsuit.