In the OLD days that's how things worked. You got in to a company through the mail room or some other 'get to know the staff' position, then applied for better jobs in the company. Internal hires would typically be tried before looking outside since they'd have a track record that someone wasn't a flake.
I'm speaking generally, about large companies in the 80s and before (though I'm thinking of a film that 'documented' it and I saw on TV when younger... "The Secret of My Success" (1987)).
The outsourced / pigeonholed employee pattern you're speaking of is something that I recall learning about more in the early 2000s; so it's been around for a while but not widely known outside of the industry.
If you’re talking business in general then sure. In programming it’s very hard to move from QA to dev. I’ve rarely seen it happen, and there’s usually a reason why someone goes into QA vs dev, ie they are a below average developer.
