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The fact that you didn't see planes falling out of the skies is a testament to the Line Captains having the patience to function as unpaid instructor pilots - which is not how the system is supposed to work.
Back then, that's exactly how the system worked and everybody knew it. You didn't walk in surprised by it, I suspect. And someone taught you (even if it wasn't 121) the things you passed on before that.
The only place that differentiated between "paid IP" and "non IP" with washout occurring prior to flying with "non IP" back then, was the military. Which, I believe is your background, but I don't remember.
Everyone, and I mean everyone, knew exactly what the system was in 121 back then. Captains taught stuff the training system didn't. If they didn't, the airline probably couldn't afford to do it any other way, and they'd go under. It's a way to leverage experience and increase margin.
Happens in every business, actually.
One of the reasons folks with a military background lament having to train other staff when they move to the normal working world is twofold, military can literally draw from an unlimited budget -- compared to the private sector anyway, it's as close to unlimited as need be for the purposes of discussion -- and military can define a "mission" and demand someone meet the "mission qualifications" anywhere in their training timeline that they prefer it to be.
Private business often defines their training as OTJ and it's exceedingly normal for any role. A senior person is paired with a junior person and the senior person keeps the newbie from hurting themselves, someone else, or the company.
I'm not saying it was right, or arguing to do it either way, but your complaints about it are often funny considering it wasn't exactly a secret. It had been that way since Ernie Gann's book in that part of the aviation world, long before you got there.
I've been mentoring and teaching newbies in telecom and IT for nearly two decades. I don't run around complaining that the system is "not supposed to work that way". It'd be great if it didn't, sure... but the companies see a value in trading time I could be doing something else for the company in teaching and mentoring and they don't see fit to hand out any larger change to my title other than "Senior".
Your title change was "Captain". Welcome to the old guy club. Everyone gets to do it.