I work with HR team who sets compensations for our global workforce. If you think that HR and leadership does not take this opportunity cost in consideration when setting policies, you are badly mistaken. They are very rational in their decision making.
This is the point that doesn't make any sense. If it costs them X in OP's locale and 2X in EU, the company should kick them out if they decided to move and replace them with someone in the original locale, or maybe someplace even cheaper.
Because of that, the rare employee who does move can be paid the new location wage without increasing the costs of the people who don’t move. Companies don’t care about the costs of the <5% of people who move. They care about the costs of the >95% who don’t.
(Side note: There are companies who budget in headcount and work like GP suggests. I think most companies budget in money and work like you suggest.)
The opportunity cost of not having that senior dev on board for more than 3 months is damaging for rest of the team and company goals/time lines. In the current market, my guess is that this person would be replaced with someone NOT in that location unless for some reason it is business critical to have someone in that area, which is almost never for software developers.