I've seen it in action a few times specifically in government.

It's extremely difficult in my country to fire people in government. Managers want them out of their team but have no way to shift them. They are taking up one FTE in a key area but the person is just swinging the hammock doing just enough to keep from any proceedings.

Finance won't give them more headcount.

So they promote them to another useless department instead. Done.

I know it's been done because I have been to drinks with the senior managers who did this a decade ago when I asked what the deal was with XYZ manager that had been there for years and was truly one of the worst managers I've ever heard of. They intimated a few others were the same across the org.

Off topic - the manager mentioned was comically hilarious in laziness and lack of care. He once invited a new hire to a meeting, and attached the minutes of the meeting including the conversation that had not happened yet (they'd never even met yet) with statements like "Joe Foo agrees to let manager know if work is too much" etc etc.

It was a template he sent out and he never even came to those introductory meetings. Just you agree and then neither of you actually meet.

Government can be a different world so I understand when people think people are just inventing insane theories to justify their own ego, but these things really do happen in certain industries and types of companies.

This reflects my own experience too. Generally speaking, incompetent people don't get promoted in the same way you normally understand promotion. They don't get their boss's job. They don't stay in their boss's boss's reporting line.

They move to a nominally higher level role in a different department, often a cost centre, generally to some role which serves the organisation just by existing (e.g. a legally required role, or something that serves some certification purpose, or so that sales teams can say 'we have a dedicated person in our X office for doing that').

I can relate to all of these. One way to get rid of them is to put them on a "special project". Something low stakes and inconsequential to keep them busy.