If the project fizzles out or fails spectacularly, does that not make you more of “the fool who couldn’t do it and didn’t know when to quit?”

I see your point however you'll be covered by the dynamics of the organizational hierarchy. When the mid manager's ability to bullshit senior management eventually runs out then the project will fail, not because of technical reasons, but because the senior management will terminate it. The mid manager will then get reassigned to somewhere very far away and you'll get a new project with a different manager.

In teams with three+ developers, the one who often bears the brunt of failure is the middle manager, not the workforce. Senior management typically holds the middle manager accountable for the project's shortcomings, rather than the individual contributors. As long as you fulfill your duties (do whatever is asked), your reputation will remain intact, portraying you as someone who consistently delivers without giving up.

At the end of the day it boils down to the waiting game: who will quit first or run out of bullshit. This is the dynamic within most organizations and ultimately, individuals who "do whatever is told" and never quit tend to emerge as unscathed heroes.

How do you see this reputation spreading? Just the diaspora of former coworkers is wide enough that most/many companies tend to have someone who knows / has heard of you?

A guy knows a guy that know a guy... reputation plays a significant role and even seemingly innocuous comments "yes he was at my company for 1 year and he seemed like a nice guy but then he left before delivering his first project" can have far-reaching consequences.

Moreover, burning bridges by leaving a company before delivering a project can indeed makes it next to impossible to return in the future. Maintaining a good relationship with former employers is crucial, after all you never know when you may need to go back to some company.

I only have a ~20 person IT department without much churn so it feels quite small to me still.

In a smaller or medium-sized city where good IT job opportunities are limited, burning bridges will significantly impact your future prospects. Each negative remark or unfavorable departure from a company could potentially close doors to employment opportunities permanently.

Consider the following: 15 out of those 20 people, at some point, leave the company and while they "know you", they never worked on the same project. This may lead to those seemingly innocuous comments and burning job opportunities at 15 different companies - a considerable percentage of potential job sites in some places.

Also there's the issue of recruiters. They may look at your CV and if they see a bunch of companies in a short period of time they'll most likely favour other candidates.