The traditional path to leadership roles generally involve a stepped process from a role that's fully an individual contributor to one that has virtually no IC component. It's progressive enough that by the time you've stepped up to another level of management you've already grown accustomed to what you needed to let go of and what you needed to shift focus to, while having someone above you to essentially provide integration and regression testing as you acclimate to your new role.
A CTO-by-default skips that and goes from IC to "executive level authority and autonomy". They're not only managing people all of a sudden, but architecting teams and org structures. With little or no prior experience to lean on.
So they nope out of it - avoid org structure planning (and ensuing uncomfortable decisions) by keeping it all flat, bring in a people manager as a short term solution to the problem they created with keeping up with everyone, while also avoiding some of the messier side of people management. And seek comfort in the familiar work of system architecture and (maybe) keep directly managing the parts of the team that are the most capable of self-management and aren't as uncomfortable to manage.
Still a mess to be avoided, just as you said. But a mess that's rooted more in inexperience and discomfort than in arrogance and hubris.