The biggest issue is that it presents status as if it can be conferred independently of power, or as if we can change the dynamics purely by changing the way we think about this.
Managers have power for many reasons - they generally do have a significant influence over subordinate’s career prospects, and they have access to all kinds of organizational information that ICs simply can’t obtain, at the very least because they can usually spend time in conversation with other managers or in meetings with people at higher levels in the organization.
Engineers obtain power through indispensable or highly valued domain expertise or institutional knowledge.
Both forms of power are real and confer status.
If you move from management to engineering and your power as a manager is not replaced with corresponding power as an engineer then you have been demoted in status, irrespective of how the organization claims to value people.
Organizations that want to deny this, even with the most positive intentions end up gaslighting their employees. I.e. saying things like “Our organization doesn’t see these moves as a demotion”, when manifestly the individual’s power and status has changed in a way they and everyone else can directly perceive.