At first, I was not planning on attaching that question to any specific situation; I wanted a more general response. It got a lot of interesting responses, but a lot of people are asking for more information or context. I feel like this question has gotten a life of its own the way it is and if I added context of a specific situation to that question, it would probably require a change to most answers and comments...
The main thing I want to add is somewhere along the lines of what I wrote in my last comment:
seems everyone automatically assumes that either the team lead is lesser skilled than the new individual or the company is trying to get rid of the team lead in some way. what if that's not the case? what if the team lead is actually technical lead for very good reasons? or what if the company wants to keep the team lead in the company?
I am wondering should I start another question, just with a lot more context? Or should I update/add to the existing question?