I think it has something to do with founders being able to take money "off the table" when they raise a round.

If you're in a tight race against other companies which also raise large sums of money, and in markets where "winner take all" effects happen; then, it might still make sense to raise money.

Normally, though, you are probably right.

Yes I do agree, but surely you'd want to tap out all the debt first before going to equity raises. Very rarely see any debt raised in startups, so quite interesting behaviour.