They are but only up to an agreed value. If Automaticc's employees choose to spend more then they can, and probably do.

If the employer were to cover the full cost then you can be quite sure they'd want a great deal more control over where the employee was based, and if the employer could rent an office for several employees then they probably would. At that point the job stops being remote and becomes an ordinary office job. That's how these things work.

If you're hired as a remote employee, basing yourself in one of the most expensive cities in the world is your choice, not your employer's.

There was a dedicated office in San Francisco that was free for Automattic staff, but it closed down recently because they were paying to maintain a space for 300 people and only 2-3 ever showed up.