The game theory here says that such a company will be outcompeted and killed by a company which doesn't spend money+time on retention and training but instead invests that money in poaching.
What you say only works if everyone is doing it. But if you're spending resources on juniors and raises, you can easily be outcompeted and outpoached by companies using that saved money to poach your best employees.
>but instead invests that money in poaching.
give a big enough raise and they won't want to be poached. You won't retain everyone, but your goal probably isn't to compete with Google to begin with. So why worry of the scenario of boosting a good junior from 100k to 150k but losing them to a 250k job?
In some ways you will also need to read the room. I don't like the mentality of "I won't hire this person, they are only here for money", but to some extent you need to gauge how much of them is mission-focused and how much would leave the minute they get a 10k counter-offer. adjust your investments accordingly and focus on making something that makes money off that.
Its the tragedy of the commons. These companies will think they are very smart for doing this, but theyll just foster a culture where there are no competent employees once the current seniors retire