It is unparsable Dilbert nonsense to anyone outside of specific scenarios. And it causes interminable discontent. Because what if the SME is the PM because they know business and tech but the SME is actually the IC because they know the tech and its tech but what if the manager is actually the SME because they're running the tech and may need to redelegate if the IC needs vacation, blah blah blah.
(job history: college dropout waiter => my own startup, sold => Google for 8 years => my own startup)