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Isn't the real problem that B player managers do treat their C player reports like A players, and that both of them believe it ?

Treating them like an A player includes not babying them and telling them they're amazing when they mess up. So, no, you shouldn't have that problem.

But it does involve trusting their expertise and ability to deliver. After they mess up it's a bit late.

I've seen this happen in a previous job. It literally made all the top performers in the team leave.