Like a friend of mine said, where's the line between a totally honest and transparent workplace and a toxic workplace?
Notoriously, Bridgewater aims for "totally honest and transparent" communication.. and while it's clearly not for everyone, it seems to work for them.
For everyone else, clearly "safety to make mistakes" is a required condition before communication can properly be 'totally honest and transparent'. -- Otherwise, what I think you're getting at, is that "honest and transparent" whitewashes toxic political dynamics.
Keeping employees emotionally involved doesn't seem to me to be a harmful thing for a workplace, or the workers themselves. Given you spend quite a lot of your waking hours working, feeling like your hard work's going to be rewarded seems like a good thing right?
As a heuristic, honest people don't keep talking about how honest they are. So if a company reminds you regularly "this is a totally honest and transparent workplace", more likely it is the latter.