As a former agile coach I can tell you this - inherent power differentials at work mean those who have power will always seek to keep it and wield it.

Flatter does not inherently mean better. Too flat leads to the tyranny of structurelessness in which an informal group will rise to rule without formal authority. This makes them more difficult to reign in because they’re “unelected”, therefore they have no formal responsibility and can’t held be accountable like formal authority (as if that happens as much as it should any ways). They’re like a street gang.

As to managers etc., what they can’t control directly, they then seek to control the environment and employee choices, thus controlling the agency. It makes sense because some people don’t have the maturity to operate in a decentralized way. Also if your paycheck and advancement depends on how tote employee fair, you’re going to try to pull strings where you can.

Also decentralization doesn’t scale well.