But you also won't get promoted just because of seniority, most of what people say about being hard to get promoted is true. However, there are only 3 SDE levels if you don't count Principal, so SDE II has a very large range of pay rates, and you don't need to get promoted to get a higher pay. Higher levels are all about being a better leader and influencing more people. There are people who spend 10 years as SDE II and are happy with it, because they don't care about leading others, they just care about doing their job, and this is fine.
However I suppose that it stands to reason that perhaps that phenomena is due to the fact that greener managers may have greener engineers working under them who are perhaps more prone to mistakes or may not be a good fit.
But here's the real kicker that makes the company so stupid- if you're on the lower half of the rank, you're blocked from moving to another team.
Even though the HR policy is that your manager can't block you from an internal transfer, that's not reality. Which means when you're wrongly assigned to a team with a bad manager or a bad fit, you better bounce quick, or you're stuck there until you leave the company.