The people who will get the shaft here are the career bureaucrats who see themselves jumping to another agency as they can either make that way harder for themselves by moving or quit because they are already located in the best place for their intended career track.
Given the choice I know exactly who I'd rather have staffing the agency.
Replace USDA with 18F or (pre Doge) USDS and the insanity of your agreement is laid bare for even the most uncritical reader to identify. Of course such agencies would be better off (from a hiring perspective) in SF or some other tech city than they would in DC (of course their customers are in DC so that kind of complicates things).