To me, the purpose of a 'flat hierarchy' and this internal 'status game' are obvious - clandestine operation.
* Lots of projects, most of them 'clean'
* Nobody truly knows what everyone is working on. The competitive nature of internal politics makes sure there is plenty of rumor and gossip going around. What do you expect from a highschool popularity real-life mmorpg?
* It moves the benefit of compromising your morals right to your doorstep as an individual engineer. Work at Meta or Google and you can make your fuss about privacy and whatever else you feel they did wrong that week and feel like you're doing the right thing but still take home the big bucks. Work at Palantir and you're soon desperate to elevate your status. Oh and it so happens there's plenty of shady data analysis requests to go around and oh wouldn't you know it all the data you could ever want.
* All this talk about:
> Being a successful FDE required an unusual sensitivity to social context – what you really had to do was partner with your corporate (or government) counterparts at the highest level and gain their trust, which often required playing political games.
Why is 'social context' so unusually important? Your customers can't actually explicitly tell you what they want. Why not? I leave that as an exercise to the reader.