That strategy only works well in an environment with rising real estate prices and falling interest rates over the highest earning years of your career. Plus predictable taxation burden (i.e. government giving a generous mortgage subsidy).

Now, if they were in an environment with sideways real estate prices with highly volatile interest rates, would they do the same strategy?

BTW, not necessarily advocating for maxing out the 401(k)…depends on your offerings by your employer. At some, company match is in company stock…