Sounds like a recipe for high turnover

Which is often fine with leadership. New employees tend to be more compliant and more malleable to the current leadership’s point of view.

I think the reality is that inertia is a big factor. Changing jobs is not a smooth easy process necessarily. I think companies are fine with a certain percent loss of employees in attrition and if it gets too high they'll start trying to fix it, but not before.

Which is a part of why most software is garbage.

Why would leadership want compliance if it's coming at the expense of productivity? Who cares how obedient the employees are if profits are down?

Engineering productivity doesn't always have a 1:1 relationship with profits in the current quarter, it can take a while for the rot to start to show up in the bottom line - by which time people may have moved on and it's someone else's problem, there may have been an exit, etc.