The simplest explanation of these datapoints is simply that this person is not operating at the staff level in a way that is fairly obvious to others, yet hard to articulate in a way that this person can emotionally receive and accept.
None of this means they aren’t or can’t be a highly valuable and skilled engineer. Higher levels are more about capacity for high-level responsibility and accountability in a way that makes executives feel comfortable and at ease. “Not enough impact” means that even if this person is involved in high-impact projects, executives do not ascribe the results or responsibility for those results entirely to them.
While this is painful, it is not a bad thing, and it is not a disfavor. People who aren’t ready for great responsibility often underestimate the size of the gap. Watching a talented engineer get eaten alive because they were given executive-adjacent accountability that they weren’t ready for is not fun for anybody. Anyone who has operated in true staff+ or director+ roles at huge companies here knows just how brutal the step up in expectations is. It is far from trivial, and it simply isn’t for everyone.