"This sounds like a dysfunctional company to me."

Well, I hesitate to call something "dysfunctional" if it works. It becomes a subjective value judgment.

Different companies have succeeded in different ways.

This does sound dysfunctional in a way that decision making is obviously happening more compartmentalized and individual ownership is severely limited.

There is a reason why many super successful companies have values/culture: shift ownership and decision making as much to the people at the forefront as possible to avoid “managing them from the top”.

Empowering engineers and scientists to develop a sense and say in product priorities is great, extremely difficult but speaks for a company that values contributions beyond a “specialization/niche”