I've seen that too. Especially in situations where a team has specialized skills, and are not easily replaceable. If you treat them as subordinates instead of peers who need direction on the big picture (and reminders that profit has to be balanced with cool work ideas), then you will sink the ship. But what I usually see happen is someone else in management sees what is going on and gives them a silent demotion with pay. They get sidelined before they cause too much damage amd everyone just ignores them until they mess up bad enough to let go without worrying about a lawsuit.
