I think there are a large number of competent but mostly checked-out engineers who will consistently work just enough to not get fired. If you want more productivity, you could raise the bar and fire a lot of people, but this also sucks and it creates a "hunger games" culture like at Amazon or Meta. I think a lot of those people actually will do more work if you make them sit in an office for 8 hours a day, since they have nothing better to do and there's immediate social pressure to work (unlike in their homes which presumably have many more pleasant activities available).

This isn't obvious to people who are highly disciplined and intrinsically motivated, since they actually get more done in the quiet environment of their home. But some people need the structure and social pressure of an office to get them to work. Your strategy could be "only hire highly disciplined and intrinsically motivated people", but you'll have to compete with everyone else for them, and they're expensive and less common than the other type. It's also hard to test for in an interview.

If you're really exceptional, they'll quietly let you WFH anyway.

They can chit chat and do nothing in the office just as well. That's what I normally see when I do go to the office.