It's also about productivity. If the employee functions significantly worse in a remote position, then extending that to them is going to be often a poor decision.
I feel like I'm struggling with this now: I have fought for a long time to get my team to be fully remote. After a year of partial WFH, now we're doing it full time. However, several people on my team seem completely incapable of self-regulation unless someone is making them show up. They're up at 3am working, but clearly only getting done >5% of what they'd otherwise do. A few others are getting done at least 120% more. Seems like different strokes for different folks is the name of the game, and some people for whatever reason just aren't in a place in their lives where they are responsible enough to handle the greater freedom of remote work.