Traditional universities were structured like guilds. After you completed your studies in liberal arts, you got the rank of master and the license to teach at any university. The members (masters) of the university made decisions by vote. The idea that universities should have bosses and that the faculty are employees is rather new.
These days, the weirdness of academic job markets is mostly limited to research universities. That's because universities don't do research, but they still hire researchers. They provide office/lab space, equipment, and administrative services to researchers in exchange for a large fraction of the funding the researchers are able to obtain. Senior researchers are employees only in a technical sense. If one of them quits, the university most likely won't try to hire another person to continue the research. Instead, the researcher probably takes their job to another university and continues there.
Research universities hire people who teach, mentor, and serve in administrative duties. They don't hire people to do research, because they don't do research and have no need for researchers. They hire active researchers and give them the opportunity to do research primarily for the prestige value. Because most universities are funded by taxes and/or tuition fees, they can't pay competitive salaries. In order to attract top researchers (and thus prestige), they have to offer something else. In most cases, that "something else" is a promise of a permanent position with the option to spend a large fraction of their time on whatever they are interested in.
These days, the weirdness of academic job markets is mostly limited to research universities. That's because universities don't do research, but they still hire researchers. They provide office/lab space, equipment, and administrative services to researchers in exchange for a large fraction of the funding the researchers are able to obtain. Senior researchers are employees only in a technical sense. If one of them quits, the university most likely won't try to hire another person to continue the research. Instead, the researcher probably takes their job to another university and continues there.
Research universities hire people who teach, mentor, and serve in administrative duties. They don't hire people to do research, because they don't do research and have no need for researchers. They hire active researchers and give them the opportunity to do research primarily for the prestige value. Because most universities are funded by taxes and/or tuition fees, they can't pay competitive salaries. In order to attract top researchers (and thus prestige), they have to offer something else. In most cases, that "something else" is a promise of a permanent position with the option to spend a large fraction of their time on whatever they are interested in.