I wouldn't even call it that. It's a weird lack of a sense of scale combined with organizational hurdles.

They basically can't estimate, how much resources a proper app would need and they don't know how to manage teams to work on a common codebase. So they simply draw a diagram of the functionalities, spin out each block as a "Service", assign that to a team and call it a day.

I've talked to several of them about this and I had to do very simple math directly in front of them to convince them. I've had to explain to a grown man, an experienced engineer, that 16 cores and 96gb memory are more than enough to handle a million simple inserts per day in a batch mode. He wanted to split the job into 4 services, each essentially running 10 lines of actual business logic, each using the resources mentioned above. Absolute madness.