Smaller businesses or privately owned businesses with a smart owner do.
Large publicly traded companies are sustained by a perception that an investment in or loan to that company will pay off in a higher dollar amount in the future, so if the perception becomes the company is shrinking then the investments and loans slow down which makes the perception worse, you get that feedback loop which turns into the death spiral.
So the bigwigs at the top of these companies have to be professional liars and gamblers to change the perception and make it look like everything isn't just fine, they're doing great! The line must go up.
Senior embedded C developer here in the US. I can speak first hand experience at people applying to be on my team that have reasonable sounding experience and then collapse under interview questions.
Everything else you said applies here too, legally we don't have repercussions for firing someone quickly (once had a team member for two months), but a healthy org will try very hard to get hiring right because it can cause pretty bad morale to see a revolving door and there is a massive brain and resource drain having to constantly be training new people.