Yes, the Fair Admissions Code explains it clearly.
In England, unconditional offers are for those who already have got their qualifications, or for courses where things like audition, portfolio etc, act as qualifications and it is judged that he required standard has been met.
Oxford give AAA rather than higher offers as standard for candidates for humanities subjects, having tested rigorously via admissions tests, essay submission and interview. These candidates are expected to achieve far in excess of AAA in reality, but AAA becomes the equivalent of the old EE offer. Oxford wants those candidates and knows they are good. They want the candidates to keep working hard, but don’t want the vagaries of exam marking in humanities subjects, to mean an excellent candidate they have evidence for already as strong, misses out their offer getting an A instead of an A star.
What OP’s colleague is talking about is different unless it’s for a subject with audition, portfolio, interview etc. It is a bums on seats approach. It is an attempt to persuade candidates to firm them and fill their places, because they fear this candidate might have preferred offers and go elsewhere.
It is strongly discouraged as it tempts candidates to go for a certain but less ambitious option, which is evidenced to result in people working less hard and doing less well in their exams.
Students don’t just need A Levels for uni entry but will out their grades on applications for jobs, so doing the best they can is really important.
What is seen these days instead of unconditionals is some places offering a one grade lower offer if candidates firm them. This is different to the grade lower offer if they get A or above in EPQ. Lots of students like it. It’s fine if that was the place they wanted to firm anyway. It’s less good if it sways them towards that place when somewhere else would be better. As ever,it’s offered by unis which might be good, but actually need to employ tactics to ensure they fill their places. The most popular courses at the most prestigious unis rarely do it - they don’t need to.