OFS, initially yes, you are correct. But it works both ways in limiting the access that pilots from other subsidiaries have to slots that a pilot rightfully has in their own company.
After a few years the situation irons itself out. The Qantas Y list initially protected members of the different hauls from "poaching" of their slots by pilots on the other haul. Now, most QF pilots have joined below the Y, and if their seniority is sufficient, they can bid for a slot in either long or short haul without fear that someone in the other haul has priority.
Seniority is the only criteria in most cases now. I believe all A list pilots have seniority for a 767 command now if they wanted one and there is one available.