We discriminate pay on job role, on job level, on performance. We discriminate on length (tank crew), eyesight (pilots). That is not Discrimination however, because it lacks a historic asymmetric power balance.
The main difference with GitLab is that a) they are completely remote, b) they are called "GitLab" in every country instead of creating subsidiaries with different names, and c) they have made the "mistake" of making the payment differences entirely transparent. They were absolutely not forced to do that, but they did it nevertheless, and they should be applauded for that.
Obviously there is some correlation with pay vs cost of living as it helps people determine what they are willing to accept, but it is not the primary mechanism companies are using.
Also companies who pay the same regardless of where you live are still not paying based on cost of living.