This is true in mid-sized startups. I actually witnessed it three times during my _short_ period of experience (7 years of different startup contracts) with different startups.
Firstly, it does not have to be immediate or deliberate. The cycle happens approximately through period of 6-months. The followers per-se does not have to actually _follow_ or loyal to the main person. The said main person is generally the CTO or an engineering manager.
Essentially, one way or another, the company needs to hire a CTO to fill their technical gaps and propel their growth. The company looks for an experienced and preferably startup experience in a certain field. There are already very limited number of folks satisfying these conditions. In which, mostly will already be working somewhere.
From the available ones, company hires 1 person, the CTO. CTO identifies several gaps in tech stack and hires couple of _senior_ folks, with of course, recommendations/references. (now called staff engineers mostly, as the seniority sort of lowered at the 5-6 years mark).
After couple of months later, the senior folks hire couple of mid-level folks because there are too much work to do. Since the senior engineers were busy both with design _and_ the implementation, they need to focus more on the design and make big-picture decisions, cannot be bothered with bug-fixes anymore. Therefore, they need some mid-level engineers to cleanup things and keep the lights on...
After 6 to 9 months period, the newly hired folks become 7 or greater in the numbers. As now they are the majority in the organization's technical hierarchy, they can easily push-out _older_ members which are not part of their circle and let more folks from their circle in.
As you guessed, this is a pyramid scheme in employment, as the lower level folks look up to people who hired them (created a position/opening).
Even if the actual scheme is not intended initially, usually this is what happens. It doesn't even have to be a grand plan to take-over, the unconscious biases and past relationships always prevail, causing the same cycle to repeat.
Also another perspective is the people whose boss (CTO) has just left. These folks also leave over time not just they blindly follow their CTO or loyal to them, but because the _new_ CTO changes how things work, maybe a new tech stack people are not familiar with. In turn, it stagnates peoples' carreers, causes confusion and even takes them one step back. (i.e. An engineer on a promotion path now has to re-prove their skills to a new manager/CTO)
I think for all the cases, I did not find this approach useful in the business sense. Because in all cases, it took the startup at least a year to adapt into a new CTO and the tech stack. As the new CTO always assures X is better than Y, all the problems are there because Y is older, and X is the new paradigm. Just to be replaced by Z when the next CTO arrives after several years...
So the moral of the story is, people don't need to be loyal, the incentives make them so.