In my interview group at sw. 1 of 8 was civilian. 4 got hired and only the civillain went to class. Every military guy that day already had class dates at another airline and interviews schedule at the remaining big 3.
Lots of options out there.

What kind of tax break? Is that for only current military or retired military? On the surface it sounds like urban myth though.

What they do get though is a known quantity that has been vetted through a flight school process that doesn't allow much room for error.

They get a consistently drug free employee and probably the most valuable thing is a pilot who very likely will stay on TRICARE and not use the companies medical benefits which does save them money.

So you do get a few upsides, but for a downside, if the pilot is still in the reserves they have to allow for MLOA which can go on for up to two decades in some cases.

I think it's a little bit of all of the above. SWA has hired a lot (maybe too many) military guys in the last few decades. There is a very Air Force centric vibe here, which is good and bad in a lot of ways.
That being said, the balance is definitely shifting. There were four pure civilian pilots in my class out of 24, now many classes are over half. With a civ pilot, you get someone who is often 121 experienced with time in the left seat flying in a 121 environment. That pilot also doesn't have any reserve commitment and more than likely doesn't have another source of income to pad another reset to first year pay at another airline. You also get someone who has been to another airline and realizes that flying to Aruba does not require the level of attention that flying to Mars does.

A bro of mine interviewed 4 times-got in on the 4th try. Small door closes over here means a larger door opens over there.

You might not see it now, because I know what the sting of a rejection letter feels like, but if I'd been hired by a "major" when I was trying so hard, I wouldn't be doing what I'm doing now-which is SSSOOOOOOOOOO much better.

Have a beer or three, shake out that gravel kit, and onward and upward.