Counterpoint: I've made a 20-year career out of doing exactly this role, and it's been great for my career and for my teams. For me it's just another level of the specialization question. Just like being a specialist in some hot field will get you outsized compensation from a Google or an Amazon, it will also make you struggle in environments where you have to wear more hats. If you want to remain a pure IC and move up the technical ladder, you are A) limiting yourself to companies that have an honest IC tech ladder and B) at the mercy of whatever management you happen to land under.
Even your "best case" scenario is someone who is laughably incompetent at management, akin to a programmer failing fizzbuzz. Obviously there is some truth behind the stereotype of the incompetent manager promoted up from an IC role, but management is a skill that has to be learned. No one is surprised that it takes years of intense practice to become a competent programmer, but somehow there seems to be this feeling that management is based on intrinsic unlearned "soft skills". Nothing could be further from the truth. To be a good hybrid tech lead you have to first understand that management is a skill, and that the success of your team is by definition more valuable than your IC contributions.
Obviously doing this hybrid role comes at a cost in each of the respective skills, but having both management skills and technical skills in one brain is highly valuable in many situations. First of all, it's a clear win in early-to-mid-stage startups where you're too big to have everyone in a daily standup, but not big enough where you can justify the overhead of full-time managers. But more generally, as a hybrid tech lead, I can communicate up, down and laterally with more efficacy across the board. When communicating up or laterally I can more effectively speculate and brainstorm about technical approaches at an earlier stage without disrupting other devs who are in a flow state or are liable to get stressed out by blue sky ideation when they feel management does not respect the work that will get dumped on them. When communicating down, I can speak the language of the front-line engineers, and garner a lot more respect than a manager who offhandedly makes clueless statements that undermines their authority based on unfamiliarity with the code.
One way I can be optimally deployed is to build a new team from scratch. I can build a prototype and engage cross-functionally by myself initially, and then if it turns out to be something we want to invest in, I can smoothly add in other resources, recruiting from other teams, or hiring them myself if necessary. Unlike a pure IC I will not chafe at my shifting responsibilities, I will embrace the management aspect and be happy to turn over authority of the code base to new blood coming in.
I'm not a perfect manager by any stretch, I see a bit of myself in some of the horror stories for sure, and I learned a lot of lessons the hard way. However the hybrid qualities pay huge dividends. Specialization is for insects.