"- you work for minimal salary and generous equity; when push comes to shovel, CEO will kick you out of the company due to "company problems" and claim your equity; bonus to the threat to your existence will be burnout from overworking and lack of credit"

I have personally seen this more than a couple of times. The worse I have seen is the CTO having worked for the company for a few years get fired and then his shares diluted away to nothing.

There is a correlation between these types of CEOs and hiring fresh grads. They are more susceptible to this type of brainwashing. Engineers with a few more years of experience having seen this are more wise.