> > Your capacity is adjusted accordingly. ...

  > That level of micromanagement is demoralizing and it hurts the company.

The micromanagement identified is not in the type of work which is most appropriate to success, but instead in the "detailed capacity accounting." This level of "accounting" does not convey trust in an engineer, thus demoralizing them by way of eliminating their autonomy (freedom from external control).

Encouraging engineers to "spend a sprint worth of time in every quarter" or the "next two weeks on a training or self-learning" is laudable, but does not qualify as providing autonomy or the lack of micromanagement. The reasons why are A) the decision is still solely yours and B) clearly time-driven instead of collaboratively prioritized.

  You've complete autonomy ...

Not if you decide when, how long, and with what fixed frequency someone can work on tasks which impact "velocity."