It's essentially the concept of an apprenticeship as it works in the UK. The apprentice is paid a far below minimum wage salary, and is ostensibly trained by the company they apprentice with as part of their remuneration. The apprentice then works on commercial projects, again ostensibly with mentors.

Heck, throw in a ~$5/h wage and it's basically the UK apprenticeship model except with the guarantee of an actually qualified mentor. I agree that working for free is a bit of a steep ask, but I know I'd prefer to work for free with a properly qualified mentor than work at $5/h for someone totally unqualified (as my own apprenticeship turned out some years back).

EDIT: Yes, my last line is a false dichotomy. Ideally you'd be working for some sort of wage with a qualified mentor.