Your post reads like you think this is scandalous. I’d say it is totally normal in many places even encouraged for people to move between teams and roles in large organizations. What your coworker did was clever in that he demonstrated his skill to the hiring team making it way more likely that they would be open to taking him whether it was he or them that initiated the conversation about moving when the time came.…
My first job out of graduate school, forty years ago, was an office job at a large public university in the U.S. That university announced all nonfaculty job openings through a central office, and current employees were welcome to apply for internal transfers. I was not unhappy in the job I had, but I did interview a couple of times for jobs in other departments that paid a bit better and seemed more interesting. I didn’t get either job, but I came way feeling positive about the process, as I felt that I had been evaluated fairly and that other opportunities would come along eventually. If I hadn’t moved overseas a couple of years later, I might very well have continued working at that university until retirement.