BTW, if I get hired in big metro city (with very high cost of living) and then move to a smaller area (or vice versa) how are organisations suppose to handle that? As a remote worker won't I loose my freedom to move around if my salary is bound to the place I live in?

This is exactly what Facebook is saying: you can't just move w/o also being prepared for a salary scaling (up or down). They will be monitoring where you access the company VPN from and expect that it gets accessed from place that your declared to be your primary residence. They're not taking away your freedom to move, only your freedom to play the geography-arbitrage game. IMO, equal pay shouldn't be governed by laws but by proving your worth to them and the normal cycle of supply and demand.

Umm... Facebook also wants to give paycut if you want to go remote. Allowing remote as an option (so in any crysis you have steady workforce and processes for remote work) and making in-office much lucrative (better salaries + big city benefits) so that things don't actually change much. Classic Facebook

You realise that people would easily game that system by temporarily "relocating" to SFO when starting the job and then moving back to a cheaper town at the SFO salary. How is that fair to people who actually live in SFO?

Exactly my point, It's not fair. Just like it's not fair for someone who earns a decent wage living in delhi but wants to move out but can't without taking a paycut. Just because he can actually move out of middle class and build some assets in a small town, while still having a work life balance. Let's cut down salary because he don't "need" that much money living in a smaller town? Living in SFO is a choice just like moving out of. You get paid for your output, not how you spend it.