I have figured out how it works and will briefly explain below.
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Of course, nobody would search like this in practice; the search should produce zero results if we had working Boolean search. However, these results shed some light on what is going on. Let me explain.
If you search for senior software engineer (without the NOT additions; try it), LI would include:
a) synonyms and variations for “senior” such as “sr” and “snr”, “software” such as “sw”, “engineer” such as “engineering”
b) translations into other languages, such as “Ingeniero” etc.
It would look in all titles present – and past as well.
You need not write (senior OR sr OR snr) (etc.) – synonyms are included automatically.
With the awareness that the search is not Boolean, you can take advantage of the current implementation: keyword search for a job title returns all the members for whom this is a present or a past title. This search is otherwise unavailable in LinkedIn.com.
Meanwhile, LinkedIn Recruiter has its own, different ways to include job title synonyms.
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