On top of that the employee is probably providing microfriction in day to day life: asking to reschedule meetings when double booked, having a longer than necessary delay in email/Slack responses.
If the person is a contractor it's a valid thing to do, but going to work for a w2 implies that job will be your primary commitment outside of family.
In this case, my group at IBM is a consulting group and we work with multiple clients at the same time. I've had two (sometimes three) clients with production down issues at the same time. It's a solved problem, and we solved it by eliminating single points of failure. Every project we have a lead and a backup, and some bigger projects we have multiple backups. We also keep good documentation for projects in a standard template, so even if the person knows nothing about the project, they can step in, spend five minutes reading the docs, and then jump straight in.
Same thing with scheduling. We have to do a scheduling dance when we're putting out meetings because clients can't see our calendars and we can't see theirs, but it works. Is it perfect? No. But it's not a show-stopper either. Business still gets done. Work gets done. The only friction is the mindset of "that job will be your primary commitment". That is the only thing that's holding it back.
But like you said, it can be easily overcome by just saying you're a contract employee instead of a full time employee.
On the other hand, there are a lot of psychological / social mechanism which makes it so that more trust is built between coworkers / managers when they all gather everyday in the same place (what if an employee has life issues, how to handle that with the work they need to perform ? a good talk with a manager you trust could lead to solutions based on trust and face to face talks). By reading stuff about remote companies online, it seems like they are handling that by having annual or bi annual company-wide meetings / conferences / gathering. Which is great ! I just keep thinking about the differences between remote freelancers and remote employees, especially for computer science where there is a great lack of good developers around (so good ones have a lot of lever)
My question is always how is this any different than when someone is sitting in the office? Unless the employer is literally standing over the persons shoulder all day, work and play look exactly alike. If the person is actually working another job, then it looks even more same.
You could expand upon that by getting into all the different communication tools and channels that are needed, as well as the product management maturity that is needed, and the individual communication skills. But at the end of the day, remote working lives or dies based on good communications and instructions.
A frequent example of this is having remote attendees in a voice/video meeting not being recognized, forgotten or just spoken over. Learning how to integrate remote employees and behaviors takes time to learn for any organization, even competent ones.
Works well!
One possibility for the lack of visibility is that the companies don't want to be known for failing at their support for remote work. This comes off poorly for the employer in multiple ways.
In my personal experience, most companies that try and fail at remote work didn't set themselves up for success and the motivations were lacking. They weren't prepared to make the right trade-offs and commitments, so it was obvious it wasn't going to work.