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> The sage wisdom from the ILM professor was essentially to avoid pissing off rejected candidates by not interviewing them, as interviewing is a signal that the employees are qualified.

It makes sense, if the candidate is interviewed + rejected they know there is no upward mobility for them in the company. The next logical step is to look for employment elsewhere that may offer upward mobility.

[burnished]

Opposite. If they are interviewed then they know they are being considered. Further, they are less likely to leave if an internal candidate is selected. The article opines this is because employees will then believe that future hires might also be internal, whereas an external hire signals broader competition for a role.