I think down leveling is quite common, especially at higher levels as the expectations grow quite a bit between senior and staff. Depending on the position, actually filling it with +/-1 of the target level is a win. Interviewing is expensive and if a candidate is good for the role, but perhaps just a bit below the bar, then a recommendation to hire at L-1 tries to keep the candidate and give them a career path.
This is from my perspective at Google, I've never worked at Amazon.
This is from my perspective at Google, I've never worked at Amazon.