In my biased / personal experience, the veracity of such a bar kinda deteriorates over time and the short average tenure makes most promo processes corrupt B.S. when folks are more incentivized to just quit and join somewhere else for more money.
Also, this process and your suggestion at a "probation" tends to motivate working harder for the window being measured, regardless of how actually adept or well equipped the person is at the level for which they're trying to illustrate competence.
Some of it's about a company having reasonable tracks for people depending upon their preferences. But people may also have preferences they're just not suited for.
Yes, and this line of thinking has spread to many orgs. And as you point out people tend to just move elsewhere instead.
The length of the observation window is one thing, and more fundamentally employees are asked to work above their pay grade in hope for it to be noticed/recognized, which is never a fun thing to do.
Then comes the responsibility problem: If a dev want to become a manager, there's no way to let them deal with HR, write performance reviews and do 1 on 1s including private information as a trial. They need the actual role inked in their contract, have people treat them as a manager. They can't be doing it as a role playing exercice. A probation period could work, but I think it would be pretty awkward to have them step down after 3 months.
That gives the organisation a way to tell if you are ready for permanent promotion, but removes the humiliating experience of "not passing your probation".