In this specific case (Tailwind Labs) I don't understand this sentiment at all. It was a completely bootstrapped company! Its entire existence is due to the many years of difficult work by its founders.

What exact outcome would correctly align with "good leadership" in your view? It sounds like you think the CEO/cofounder should have "gone down with the ship" here -- how does that help anyone if it means the entire company would have failed?

It is common in our industry isn't it? There was another startup that fired all their employees then one month later got acquired by CloudFlare. Hard to not see this as fraud in the loose sense of the word.