I totally agree with you that a typical CEO would not put up with this at all, but then I don’t think this is a very typical situation :D I would assume she knew what she was getting into. He named himself CTO so it’s not like he’s no longer involved in the company, and the CEO can’t really ‘overrule’ him on any product decisions or anything else since he’s technically also her boss.
Now, if he’s smart he will hopefully at least take her opinions/guidance into consideration, but 🤷
Keep in mind it’s not an all or nothing thing, they’ll assign percentages of fault. It’s also important that they name name basically anybody involved because the others will try to blame Google to shift fault off of themselves.
Effectively you want to name everybody possible so that they all fight it out.