Would like to point out that many years ago with respect to collecting unemployment that it was clear to me (after speaking to the former employees) that the ss office in the state that we were in was purposely coaching employees on how to stay on unemployment as a way of regulating the labor supply which could only absorb so many people otherwise wages would be depressed. My point is simply that there could be multiple masters being served here by these policies. Not saying that is why it is happening in your example but on the surface some things that don't make sense sometimes fulfill another purpose.

Another example might be looking the other way while employees cheat on expense reports. They get the money and everyone avoids additional payroll taxes.