I don’t think hiring managers really want to hire the best programmers. They want people they feel comfortable managing, someone who isn’t going to be challenging them. There is no risk in leaving roles open, in fact it contributes to their job security as long as there is VC money to burn. That is why the coding challenges are so popular, it communicates “here, do what I say.”
Yes, I've encountered managers like this before. They value loyalty and obedience over skills. They don't hire "smart" people because then these "smart" hires would point out how ignorant they actually are and make them look bad. Or worse, they would become direct competitors and possibly take their job. These managers are abundant especially in large old enterprise companies where accountability and oversight is non-existent.