Agree. I wouldn't say it's broken; the somewhat-overlapping Venn Diagram metaphor is apt. But like many other domains of power, there's a persistent belief that those who are recognized (promoted) are indeed the best candidates and that false negatives eventually correct themselves.
Believing otherwise is psychologically dangerous: if the system is somewhat arbitrary, then that opens up the possibility that their promotion was also somewhat arbitrary and not under their control.
It it usually correlates even more with their ability to portrait themselves as capable.
Thankfully, there is significant overlap between these groups, but sadly not a full circle if visualized as a Venn diagram.