To be fair, I have the advantage of being part of the leadership :) (CTO at a startup).
I think this style of delivery is fine as long as both management and the teams are comfortable with it. The only thing that frustrates me in this setup is the agile theater - planning, estimating, and refinement.
One of the reasons that we stopped caring is because planning is impossible. You could plan very well and leave 20% capacity, and then get a ton of new requests in the middle of the sprint so need to replan(we leave that to personal judgments).
Can’t blame it on the clients though because they genuinely can’t plan.
My conclusion is, if my team is facing clients that can’t plan properly, don’t bother plan anything for your own team.
I think this style of delivery is fine as long as both management and the teams are comfortable with it. The only thing that frustrates me in this setup is the agile theater - planning, estimating, and refinement.