This captures it well. You can think of them as what people without power in a situation use to describe what they percieve the people who do have it are doing. There is the folk religion aspect of them, but even office politics are defined by similar conspiracy thinking. If you have thought you were being manipulated or managed with deception in an office environment, extending that to institutions is not a big leap.
Maybe I'm way down the rabbit hole, but I've often thought the crappy conspiracy theories with coarse and cartoonish explanations get actively promoted to discourage, discredit and isolate people who reason about real incentives and realpolitik.
Meta-commentators calling out conspiracies and inconsistencies are a real threat to the narratives insiders use to sustain the necessary dissonance to navigate the dynamic of influence within their networks. When you are an insider, you have to sustain the fictions that the power of your group is legitimate, your colleagues are honest and aligned to the same values, and that you are believer. You have to sustain the official optimisim line because that is what it means to be aligned to power. Summers' famous quote, "the first rule of being an insider is you don't criticize other insiders" captures it well. If you let these fictions slip, you essentially fall and define as an outsider and you are out of the game. You're marked as "bitter," "a sore loser," "hard to work with," "a loose cannon," etc.
Conspiracy theories 'concretize' counter narratives, which create a figure/ground relationship in an otherwise super complex dynamic, and this creates obstacles for the dynamic sustaining narratives. If you have ever heard someone accused of "black and white thinking," they are being accused of taking their ball and going home by attempting to end a dynamic power game by resolving it to a fact or constraint.
Nobody goes meta- when they are playing the game. You can't narrate and speculate about it and win it at the same time. I often tell people we only call it politics when we're losing, and these are all related to this idea of reasoning about people and power as an outsider, hence conspiracy theories are self-defining as powerless.
If you use a theory about others' motivations and incentives to explain their behavior and situate yourself outside of that dynamic, you're listening to commentators instead of getting into the game and playing.