Another aspect of being promoted: many of us see what the next level has to do/is doing and isn’t interested in doing that. I’ve seen people get promoted and then immediately implode because N+1 started involving lots of politics that they couldn’t or didn’t want to handle. Even senior IC roles get more and more exposed to non-technical and organizational issues.

The usual solution to "The Peter Principle" is to give the promotable employee the additional responsibilities first without the job title (or salary) and see if they rise to the occasion. If not then it's easy to dial back assignments without going through a demotion or termination.

This is very true. I think it takes a while in your career to recognize what your ideal terminal role is because you have to get close enough to some roles to realize that you never want to do them. Nonetheless, some people have a strong drive toward the status of promotion that seems to take priority over liking the job.

Finding a level that suits you and being satisfied with it is an important life hack.

During the interviews for my last three jobs, I explicitly said that my career goal was to never become a manager. I guess I started saying that when I had about 20 years of experience.