Sure, if you make a cost-optimization rather than fairness argument for Gitlab’s policy—that it's simply a way of paying every employee the minimum they can get away with—I won’t argue against that.
Well, it's both cost saving and fairness, I think. It just seems like common sense to me. If one employee by default has to subtract something like $4000 from their monthly income to cover living expenses, and another has to subtract something like $700, then the employee who subtracts less is taking home way more money if they're getting the same salary. The other employee is being punished for where they live.