Can you name any major company where an L5 equivalent level is not terminal? Many people stay ICT4 at Apple for a long time.
Performing well at a level is not directly related to promotion. You are expected to perform well as ICT4 or L5 (i.e. get good ratings), but promotion is an orthogonal process.
Apple is another outlier. Is Facebook or Amazon going to be the next example?
My previous employer had a pretty explicit "up or out" policy, until the CTO - who was the main driver behind it - left. Luckily, this was before I reached my current, happy level. I'm not sure what the L-equivalent is, but I'm a senior software engineer.
I mean, if you feel 4 of the biggest Tech employers are not representative of at least some trends about the industry, then I don't think we can have a meaningful discussion.
I am willing to accept that many employers might still be following the policy you mention. Would you be willing to accept that many employers don't?
Sure. I just think that talking about Google, Apple, etc. is like talking about how your family does things, and then bringing up that the British royal family does things differently.