Same sort of arrangement, I casually discovered, is often in play for gambling sites (pun intended). Because the overall outfit can be seen as questionable (occasionally by accident: gambling regulations change very often, so what is legal today might well be illegal tomorrow), the technical side is kept at arm's length, so that they can still attract good talent.
In my case, I just told my gf's parents that I worked for an educational video company.
Years later after I went on to another job, we told them "the truth" and they just shrugged it off.
Small anecdote, but I was recruited by and almost took an offer for the folks behind "BangBros." Their corporate structure was apparently such that the IT / Software roles worked for a shell company with a generic name, generic website, etc. This company apparently works in a "consulting" like capacity for all of their assets (BangBros, "tube" sites, cam sites, etc.)
I asked what was going on with the shell company, because it seemed sketchy as all hell. It was explained that because of industry stigma most of their employees use the shell company for their resume with generic "worked on highly-scalable systems handling N amount of traffic."
Apparently it was a highly professional outfit, and the closest you could get to dealing with FANG-level problems while not being a FANG-eligible person. Great pay and benefits, business casual dress located in a nice building in Miami Beach.