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In most companies, formal letters aren’t typical for internal moves, but internal endorsements absolutely matter. The difference is format. Instead of a letter, a direct note, Slack message, or quick conversation between leaders usually carries more weight because it’s contextual and trusted.
If you want to leverage support, consider asking sponsors to speak directly to the hiring manager or recruiter. A short, specific endorsement (“I’ve seen them operate at X level already”) tends to be more influential than a generic letter attached to an application.
I recall getting emails and even phone calls recommending people for internal roles. They're usually taken seriously, especially as the people writing them know the person and presumably have credibility within the organization. If you can have some people chime in on your behalf it can do you some good.