It's sort of an exception that proves the existence of the rule. It is indeed common for second rank school A to hire PhD's from school A. My undergraduate institution (which I'd place in the second rank) did this too. However what doesn't happen with nearly as high a probability is for second rank school A to hire PhDs from second rank school B. They'll hire from Harvard or MIT instead.

Another confounder to watch out for is faculty age. Universities do change over time. When I was in graduate school, there were a number of tenured faculty in the department who would not have been considered as potential hires at that time, but who had been hired 20+ years earlier when there was not such a glut of PhDs, not quite so much emphasis on prestige, and when the university itself was not quite as prestigious as it had become.

Most of those folks have retired by now, though, and most departments I look at are even heavier with PhDs from the Harvard/Stanford/MIT/Chicago/etc. than they used to be.