I have been on the other end of that. Applied for a network engineering job at a university, as the role was publicly announced. Ended up having the internal "designated candidate" on my interview panel. Not entirely surprisingly, I did not get the job.

I don't think I was supposed to know the name of the internal candidate, but having friends who worked for the uni, I knew the name and, well, the internal candidate would certainly have had a better culture fit.