What often happens is a rewrite that keeps the same mistakes as the original product (either organizational, specification wise or technical).
I have no idea about management, I just constantly see restructurings of departments going wrong.
Just firing everyone and starting over from scratch is never going to result in an improvement. Even if the problems were because the original team was just incompetent (which it rarely is), you aren't going to get a better team the next time because if you knew how to hire a competent team you wouldn't have hired an incompetent team the first time.
So I think it may not be as crazy as you make out. On the other hand were they really underperforming? Isn't Tesla's charging network still world leading?
I suspect that just replacing the individual people would result in more or less the same unhealthy culture unless you also took steps to change the rest of the organizational context.
He did this with Starlink. One day he wasn't happy with how fast Starlink was progressing and so he went up to Seattle, fired the entire team and started over. That led to the Starlink we have now. I have spoken directly with employees there and they totally believe in the mission more than anything and they want to only work with other A players. Again, I am amazed that Musk manages to keep attracting top tier people to kill themselves over his vision but i'm not an A player so what do I know.
It's like the difference between between reproducing a proof from a math textbook and actually proving a new theorem yourself. The latter takes a lot more time and effort, even though the amount of work in both cases looks the same from the outside.
But seriously, how can you not go to Twitter and see that it has become totally enshittified. The real lesson learned there is that large tech infrastructures are actually stable enough to survive a lot of BS without collapsing. Doesn't make the products pleasant to use, though.
I think it’s hard to see what has happened to Twitter as anything but utterly breaking the business.