This looks like the age-old issue in technical teams: Some people are 'made' managers when they actually don't really want to do that job (and often they also are not very good at it).

In my view, the overwhelming aim is to have good managers, not to try to dilute the job in order to placate managers who don't really want to do management.

One standard solution to avoid people thinking that they have to go into management to grow, it to provide a technical development path that provides status and money (so-called dual career ladder).