That's not how it works in real life.

No, this is how it shouldn't work in real life. But I think I know two specific examples where it did.

I guess in both situations it helped that no other programmer wanted the position. Also it seemed that the leadership of the company didn't have a clue about what the team leader should really do; they probably imagined something like a programmer who coordinates other programmers, not a separate career track -- but that is just my guess.

In both situations, these people were disliked by the rest of the team, but since no one wanted to replace them, their positions seemed safe.

In one situation, a few years later the company leadership realized that they need a separate management career track, and hired managers from outside (I don't know what happened with the specific person). In other situation, a few years later the company hired a new programmer who replaced the original team leader (he became an ordinary programmer again), but that was caused by some changes in the company, mostly unrelated to how the old team leader behaved. So yeah, this strategy doesn't work forever, but a few years are nice, and I don't think there would be consequences for these people after changing a job.

if you are also lying to the management about who contributed how much to the project

I think you can see after a while whether the leadership of the company is interested in the details of how the company works, or if they prefer to isolate themselves and see the programming department merely as a "black box" that produces the desired output (it was the latter in both cases). And of course, you should avoid big specific lies.

I still consider this path dangerous and wouldn't walk it myself. But I saw people who took the risk and seemed to win. It probably happened because the whole environment was ready to be abused this way.