I don't think there's an ethical consideration here; it's a transactional relationship, value delivered for wages paid. If the company could get the job done cheaper in a different manner, it would do it and dismiss the employee. Is that defensible? The employee is creating value for the company. They're holding up their end of the bargain.
Companies exploit employees all the time; if something made by an employee happens to be particularly valuable, it's not like the company gives the employee a big chunk of the profits. It's not like big hits can be manufactured on demand or incentivized by bonuses, so why would they let the employee keep some of the windfall?
I see it the same way. The employee is doing their job, albeit with software they wrote, but nonetheless it's getting done.
If I were this employee I'd spend my time at work contributing to open source software I cared about and that could help me with my career. Undoubtedly, as they already realized this, their job is going to be automated away from them so they need to keep themselves relevant.
The guy is actively and explicitly lying to get paid money that he otherwise likely would not, and yet you "don't think there's an ethical consideration here"? What has this world devolved into?
Communication isn't the value he's generating, and he's not causing harm through deception.
Companies employing me all my life have lied by omission to me, about my value to the company and how much more they benefit from my work over and above my salary. Is that ethical?
He is causing harm through deception. The bugs he produces as a ruse have to be checked for and repaired by other employees who might not need to check the output of a well tested automated solution at all.
Nope, you got that wrong. He reported the workflow (possibly extended on it in a comment) as he generates a draft, others check that for bugs, he generates a final version ostensibly based on that bug-checking. Intentional errors are introduced only into the draft, not the final version, so even if his colleagues miss any of them, they aren't in the final result.
So nothing _has_ "to be checked for and repaired"; as others have commented, he's just doing his part to help these colleagues have something to do, too.
Companies exploit employees all the time; if something made by an employee happens to be particularly valuable, it's not like the company gives the employee a big chunk of the profits. It's not like big hits can be manufactured on demand or incentivized by bonuses, so why would they let the employee keep some of the windfall?