So now smaller companies (startups?) will be full of engineers who have been promised leadership opportunities? That's untenable and deceptive from my vantage. What happens in 2 years when only 10% achieve those promotions?

(Massive turnover and high recruiting costs for new "leaders".)

If the company grows, early stage individuals should all easily be able to become leaders somewhat automatically. If it doesn't grow, they can enjoy leadership and access to the top. Both can be satisfying when compared to big firms.