If the company finds a person that they want to recruit, and that person happen to live in a high-cost location, they will need to pay up in order for the recruitment to happen. The only alternative would be to offer relocation to a lower-cost region. It doesn't have anything to do with any requirement. It's just a result from the way the world works.

Given that most people aren't hired that way, it's more like:

If a person wants to work for the company but their offered salary isn't high enough to sustain a high cost of living environment, the person will need to either move or find another job.

The company has literally the entire world to find staff - that's the whole point of remote workers.

True. Still, I think most companies will take cost of living in the area where the potential employee lives into account. When thinking about it it seems odd, indeed. I guess it is kind of normal and expected. But entirely rational it is not.