A failure of management can still lead to a successful business for a variety of reasons, ranging from an in-demand product and lucky timing to great employees. Bad parenting with a great child or a great school might, too, lead to positive outcomes

I'd call an approach suboptimal or bad depending on how likely it is to lead to bad outcomes, given what the parents know about the child at the time of course (sheltering or other special approaches may be needed in some cases, depending on behavior or health circumstances). It doesn't have to turn out bad in every single case, or even a majority, there just has to be consensus about the evidence and the parents must have been able to know of it. It would have to be really bad (like complete neglect) before I'd call it a failure though

Because they don't. In order to do anything successfully you need practice. You're just depriving the kid of practicing the single most important skill - autonomy.

That’s usually coupled with a lot of anxiety. Some level anxiety could be useful, as it can make a person look responsible. This can come at a heavy cost though, which they may not let others see, and might not even realize themselves until later in life.

Supervision is only one of many factors that impact a child's development. Good genes alone can make up for a lot of crappy parenting.