When someone gets rewarded or punished, everyone watching looks at "how does this person differ from their average peer" and then assume that every aspect of that difference was the reason why they were rewarded or punished.

Even if it wasn't the reason they got rewarded or punished!

That (possibly erroneous) belief can become self-sustaining.

People will avoid doing the thing that apparently is punished, and people will notice that other people don't do it, which will make it more likely others don't do it, too.

If no one else is doing it, if you do it, you really stick your neck out. Why chance it?

Similar logic to superstitions on professional sporting teams.

In a dysfunctional environment, a very small inciting incident can reverberate around for years.

Like a traffic jam that persists for hours after the original obstruction is cleared.