1) You are correct, but this does not speak to the need for Microsoft to have sub-optimal processes in any aspect of its business.
Separately, all of the big tech companies including Microsoft pay significantly more than typical employers in places where there are no big tech offices (this is most of the country).
2) This is just incorrect. Those firms cannot sweep the labor market because their US cultures have historically been so dependent on face-time. Microsoft is able to hire engineers in Atlanta in part because Facebook and Google have yet to put down significant engineering presences here, for example. Most medium-to-large US cities do not have significant FAANMG presence and so are also ripe for picking. This is why e.g. Target is able to get great talent in Minneapolis.
3) This is a claim that is difficult to evaluate given that engineering has had essentially full employment for going on 20 years.