This used to be fairly common for H1B roles of any level - I don't find it surprising almost no one wants to fire a colleague ultimately, so doing whatever you could to reduce the number of applicants while still paying lip service to the rules is the logical outcome, rightly or wrongly.

For what its worth, towards end of 2010s USCIS were starting to clamp down on this and where being a lot stricter about the job being advertised appropriately for the role (you submit evidence of the advertisement during the PERM process).