Maybe for some people it's a game? I have no idea. The pay isn't as progressive as their recruiters claim. A high-performing Senior SWE makes money pretty close to what a newly-promoted Staff SWE makes.
But a newly promoted staff engineer has more ability to move up in pay in annual reviews.
Not really. A newly promoted engineer is very likely to get Meets Expectations, since the criteria for promotion is nominally that the person has already been meeting expectations at the next level.
Yes really based on my own experience in a FAANG - if you hit the top of the pay band, your salary will go up at a minuscule percentage, even with significant outperforms ratings.