My bestie in school is doing an internship at LSU now; last year they had a 2019 grad as an intern too. They will take one of their own if it's a really strong candidate; the only catch there is that they would absolutely not take someone for school, internship, AND residency so it kind of closes that door. However, they take their own grads who did internships elsewhere back as residents all the time.
I can't speak personally to the experience, but based on what I've gotten from the two of them, I think there's pros and cons. I know they settled in a lot faster and the adjustment period was a lot shorter - they knew how to do all the paperwork, use the records system, how things generally ran on each service, etc. On the other hand, I think they've both struggled a bit with shaking the "student" image with clinicians since they never left.
I did leave and I'm at a private practice now, and I can't emphasize enough how beneficial it's been to be exposed to other perspectives, other ways of doing things, and so on. I was just accepted back to a residency at LSU for next year, but I think having gone away will benefit me immeasurably as a doctor. But then, I think you get that if you do school + internship at one school and then go elsewhere for residency, too.