In this situation you're describing, a
single person is responsible for, and the only person at the company capable of working on, the "core of [the] product"? Unless this is a company of 1, that's absolutely crazy!
There are many reasons you'd want more people (I don't know why you're jumping to the large number of 10... why not 2?) on this "core of the product":
* mitigating risk from the bus factor (https://en.wikipedia.org/wiki/Bus_factor)
* lessening the "information silo" effect (https://en.wikipedia.org/wiki/Information_silo)
* taking advantage of a diversity of perspectives/approaches
If these ideas aren't relevant, then you're probably not talking about a very important part of a company. If they are relevant and this is a critical part of your company, then it makes every bit of sense to build at least a small team around it, thus leading to the "principal engineer" earning his/her title.
What sort of 'guiding' others would he be able to do? He could spend 2, 3 years teaching a team of 10 everything he knows
You make it sound like he'd have to quit his job and become a professor. He would continue to work while teaching the people around him. They might never learn "everything he knows", but that's not a requirement. And there's every chance someone he trains might eventually surpass him. This is exactly what it means to be a Senior+ engineer.