I spent a quite big part of my career consuming APIs and an API which always return 200 is no big deal. The opposite which I have also encountered is much worse, returning successes with 4XX, because some libraries do not like that. Why does the opposite happen? Because sometimes it is not obvious if something is an error or just another return value.

But they are higher ups and should obviously be allowed to make ALL decisions, why listen to some developer who is beneath them. That dev has only spent the last 5 years working with APIs, databases, and web applications, what does he even know, probably nothing? /s