I can't confirm the specific example, but this sounds like a smoke cover for nepotism and/or classism. If you're not allowed to recruit solely from your personal friend group, requiring that applicants be able to speak a dead language let's you select that same group of people while giving a flimsy justification.
In France for example, it used to be that all good family kids studied Latin, so high league universities and was seen as plus on the CV, at least for 20 years when I used to live there.
This sounds utterly bizarre, I have a very hard time believing this. Which countries would that be?