The damage of keeping a negative employee is often underestimated but I disagree about the other bit. Companies always greatly underestimate the damage caused by someone with years of knowledge and context leaving. I've seen it time and time again. I feel it each time I switch jobs.

It goes from: someone who can literally look off into the distance during a meeting and go "hmm yeah I just did the architecture design in my head, this won't be too bad of a project, it'll probably take 2 people 1 quarter and one of those people has to be either Alice or Bob" and then you do it and it works and it's great.

And goes to: "we'll have to do a 2 week discovery phase where one of the senior engineers goes in and reads 5 years of source code for 3 days and then mulls it over for 2 more and then does a design and confers with 2 other people so we can patch together the knowledge we lost when <veteran from first example> left"

It's damaging. And it somehow has a habit of reinforcing itself - more people leave, you end up never having people who have more than 1-2 years of context and everyone's context overlaps less. And management never cares, somehow, since all their bs metrics for productivity correlate so poorly with actual work getting done that they don't notice and in fact think the situation is improving.