Patently untrue. Setting up accounting in a new country may be a huge effort for the company.
The timezone alone may rule out a location.
Culture is closely aligned with location, and every company cares about "cultural fit" (while pledging to support diversity, of course) for better or worse.
Misaligned holidays, internet connection quality, even power supply disruptions... and so many things are directly affected by location.
That's all true but besides the point. Paying a developer less because they have bad Internet connection quality, lack availability or because they incur more administrative costs makes sense. Those are all things that can affect their work performance or cost. Paying a developer based on their cost of living or based on what their neighbors are earning is nonsense.
> Paying a developer based on their cost of living or based on what their neighbors are earning is nonsense.
I agree it "looks" like nonsense... but it's not. It's reality.
Different countries, even neighbouring countries, can have completely different salaries while doing the same thing... and things can cost completely differently too...
Just check the border between the USA and Mexico.
They're not taking a chance on location. Location is irrelevant to the job.