Pools mining for each other (as proxy pools) is an alternative strategy to de-risk variance.

A portion of the pool's hashrate is forwarded to another pool, thereby de-risking the payout of that portion of the hashrate.

Proxying reduces variance at the cost of sovereignty.

Hashrate centralization via proxy pools points towards one thing and one thing only: miners and pools hate variance.

Miners want to avoid block reward variance so badly only a select few solo mine.

Pools want to avoid block reward variance so badly they mine for each other.