They're absolutely trying to filter out the overqualified.
Overqualified candidates will resign the second they see the terrible projects the company contains.
They're looking for the sweet spot of desperation.
I have seen over qualified people take an entry level job - but it was only offered because they explained they had personal reasons to want to move to the area we were hiring (a non-remote job, though this was pre-covid), and were willing to take a pay cut. As soon as review time came they go a promotion. (At the time we only had entry level positions open, as we had "too many" senior people on the team)
You've seen through the fog my friend...