If you're not raising money, you're not doing the CEO job. My guess is they're willing to back you but see that you don't have the business experience to be CEO (and if you're the CEO, you're not going to be doing the engineering work you need to be doing to build the company). In this scenario is the single fund providing all of the $2.85MM? Is there a board? Who does the VC/CEO answer to? Do they see their role as interim (i.e. support you to a point where you could become CEO, or get the company going until it can bring in a salaried CEO)? Or permanent?
Do you want to be the CEO? or the CTO?
I'm not saying it's perfect, but a scenario where someone is bankrolling you and providing a CEO to handle the CEO b.s. while you build the company is also not that bad given the current funding environment. I'd look for some formal role definitions both on personnel as well as business (i.e. does the incubator provide basic business resources like HR assistance, payroll assistance, so that you're not burning precious seed $$ on that?).
Ask them to put in some protections for you in writing.
I mean, it sounds like they want to build the company around you and offload the crappy bureaucracy of running a company that you admittedly don't have experience with. Yes, they absolutely get a chunk of the upside out of it, but you get to focus on building the product. 10% equity seems low but they’re bringing the seed round in to fund the company and you’re getting a decent base salary. I'd ask for accelerated vesting and something to protect your equity from dilution through at least a Series A.