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.
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.