But as another poster wrote they seem to have submitted most of their staff (this is true at least in the fields I know). Other institutions have manifestly withheld a significant fraction of their staff, which pushes the GPA up
Exactly.
Which department is better? Each has 20 members of staff.
Department A with 2 really good researchers, and the rest think that delivering a 20 minute conference paper once a year is "research." They enter those 2 hot researchers, each gets 4* and so they have a GPA of, say, 3.2
Department B has a few hot researchers, most of the rest working hard with some very good publications, but no Nobel prizes. They enter everyone on a research & teaching contract (ie standard academic contract) and achieve a GPA of 2.9
I know which place I think is the better research environment.
Hint: it's not Department A