On the hiring side, everyone knows that titles only indicate relative seniority within a company. Interviewers must actually interview candidates to determine what their role was, how experienced they are, and other factors.
It can be a warning flag, however, if a company is giving titles like “Principal Staff Software Architect” to someone who is clearly junior enough that they would require a lot of mentoring and guidance if they were hired. It’s common that candidates are resistant to downleveling their titles when changing jobs, so handing out enormously inflated titles is one way companies try to trap junior employees in their companies. At least until they realize that nobody cares about their inflated titles and they still have to pass the same tech interviews as everyone else.