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I doubt they do it just to scare employees. It's way too expensive to use this tactic without having any real savings to show.
It's probably more likely that HR is keeping HR busy, because what else are they supposed to do when the company isn't hiring? The explanation that it supposedly keeps employees in check seems like something HR would say to justify their own purpose.
Any (reasonable) CEO would absolutely take thee easy and actual savings of firing the HR instead of paying them to use this unproven pseudo-tactic.
That was the first thing I thought, people coming up with reasons to keep their own jobs by saying they need to keep making job posts even if they aren't going to hire anyone, and to say that when they are ready to hire they already have applicants
I'm not in HR. In my experience there is good HR departments and bad HR departments. In both they were extremely busy all the time. There is a mountain of work HR does that has nothing to do with hiring and firing. Managing employee benefits, compliance with government regulations regarding workplace access, complex rules for reporting, tracking worker complaints and performance improvement plans for workers not meeting expectations.