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To send a message, seems like. "Senior engineering lead fired for challenging corporate directive" might deter others who thought of taking a similar stance.

"Senior engineering lead resigns in protest of corporate directive", on the other hand, seems like a call to arms for the conscience-driven; a thorn in corporate's side. Better to squash it and deal with the one-off "firing". Especially if it's for "cause"—then they can give nothing as severance, and quote a violation of the "employee agreement" as the reason.

It sends a message to the other middle managers who might also be considering protesting or trying to organize a larger protest.

The cat is out of the bag. Now the managers can quietly collaborate with the team and everyone can take their turn being the dunce until they move on in a couple of years.

Head on a pike move for the other managers.