My lab (US Gov.) is the same, except there are is also no title change for the top level. I've been a 'Research Structural Engineer' for two years, and work with people who have been a 'Research Structural Engineer' for 40 years. They get paid a bit more, and have generally put in some time with a 'Group Leader' title, but they don't get saluted in the halls.

The consensus is that this promotes a more egalitarian culture, and prevents people from being locked in to roles they don't prefer. Senior staff are free to spend a few years managing a large project or in a leadership role, then back off to get back into the research.