Alternative theory: the ranks are simply displayed as a bit of lore, to communicate to the player the military structure. It wouldn't make sense to be promoted to pencil pusher, but from a gameplay perspective, it also doesn't entirely make sense to be ranked so high that you should in theory have potentially hundreds of troops under your command. At a certain point, I would start to expect our military position to become more demanding than our status as WoL.

I don't strictly think you're wrong. Like you said, the ranks are there already. It's not out of the question that devs would have more content planned in their unlocking. But at the same time, personally, the idea of our wee adventurer selves someday outranking someone like Pipin seems strange. It's one thing to balance our adventurer lifestyle with a bit of military grunt work. But it feels like a stretch that us sellswords would find ourselves in a higher position than dedicated military individuals.