Hierarchical organizations have many flaws, yet humans continue to largely support them. Why? I think the question "why there are social hierarchies" is the biggest open problem in social sciences. There are many plausible explanations, but no clear winner.
Because with a lack of explicitly hierarchy, an implicit hierarchy is created. I'm not sure of any social system that doesn't include some form of hierarchy, but am very inclined to read an opinion.
So while it's true that holacracies can quickly turn into hierarchies rather than democracies, it's still doesn't explain why hierarchies are preferred by humans over democracies, while the latter is obviously more acceptable on the state level.