Over here the labels are 'junior', 'medior' and 'senior'. They are primarily used as a pay-scale indicator. It's not that recruiters are dumb and looking for fresh graduates with 3 years of industrial work experience, it is that they are looking for people with 3 years of experience that will accept working in the 'junior' pay-scale knowing that it will be 2-3 years before they move up to the 'medior' payscale. Many/…
To me, this makes sense, as it allows easier access for people re-training or coming in outside of school without a degree. Graduates come into junior roles due to their degree, whereas school leavers or those that have re-trained spend some time as an entry-level developer.
I've worked with a few entry-level developers, and they've worked their way up through companies to land senior-level roles in a few years. Sure, it took them a bit longer than a university graduate, but there was a route into the industry for them. It was a bog-standard job (agency dev for clients) but when opportunities are few and far between it's a great way to get passionate people in.