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I don't know how much I buy (!) this explanation - if an overqualified engineer is applying for a role that is below their usual expectations, it's probably because they can't find something that is a better match for whatever reason. If they are going to up and leave to a high paying job "easily", they would have done so already.

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The question is whether "whatever reason" is a permanent issue (lifestyle decision to reduce work pressure, maybe?) or is a temporary issue (laid off due to market crash or unexpected company merger and needs a job in a hurry). If the latter then they may just be looking for a temporary job to tide them over until they get a better offer.

Reading the tea leaves in someone's personal situation is a path towards discrimination in hiring, however unspoken or unintentional. I've heard interviewers question someone about their decision to move to another city, not thinking the reasons may be entirely personal and inappropriate to be brought up in the context of an interview.

Absolutely - there’s a ton of implicit biases at work whenever you go down this path. Comes down to, if you want them to work for you, make them an honest offer and let them decide if it works for them. Companies obviously can’t put out multiple offers for the same position at a time, so there’s a natural tendency for companies to be careful with offers and only put them out if they are sure they’ll be accepted. But in this kind of case, if it’s an offer the candidate would reject out of hand, then they will reject it immediately and you lose nothing.

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