The military is not short of entry level pilots, plenty of applicants.
The military system builds experience FAST... a pilot who completes his initial ten-year obligation is vastly more experienced and capable than a noob. A 20-year vet even more so. The issue isn't replacing the ones who leave faster, it's retaining MORE of the experienced pilots for flying and non-flying leadership jobs, as well as non-flying staff jobs.
They don't need 40 year-old O1's. A a 40 year old will most likely be too old and worn out for senior leadership roles at age 60, especially involving tactical flying. There are so people who can do military tactical ops over age 50, but the majority can't.
As Sputnik said, older people don't learn as fast and military training tends to push you to your max.