I think that goes waaayyy back to the days when mechanics used to teach the ground school. Then is was the flight engineers who taught. (Just guessing, here).

15 years ago, when the only seat you were hired into was the back seat of the 727, they typically only hired former military flight engineers or retired pilots with big airplane systems experience to be ground school/sim instructors.

The ground school and sim instructors share a master seniority list, which is completely different than the pilot seniority list, so, no, it doesn't work like many other airline out there. Besides, the company can pay the instructors a lot less (at least new instructors, anyway) to teach full-time than they could a line pilot.