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The job of a leader is to ensure that the work gets done, and for that, you need trustworthy people who won't let you down because they think you don't deserve the position.
It's not wise to assign an important task to someone you know doesn't have the capacity to do what's asked, or worse, someone who knows how to do it, but deliberately does it wrong to harm you as a manager.
Someone's competency isn't defined by their opinion of you. I've been a manager for about 16 years, and the vast majority of my relationships with my employees over the years have been very positive - I'm friends still with many who've retired - but they didn't always start that way. I still say making a good faith effort to help the team succeed, including each person on it, is the way to go, regardless of what you think of them as a person, or they you. That's also how you end up getting the respect of everyone.
You're right that not every person is right for every job, but that's a completely different parameter. Most people are relieved when you avoid assigning them to things they aren't good at unless it's a stretch/development assignment. I've had exactly zero employees who intentionally did a crappy job in order to screw me. People generally aren't like that unless you give them a significant reason to.
Perhaps it's due to my past experiences, but in the company where I was a manager for most of the time (approximately 10 years at different hierarchical levels), there was a policy of no layoffs except in criminal cases, which gave employees a certain level of arrogance. Unfortunately, I had to deal, more than once, with employees who actively tried to mess with me or a manager beneath me for whatever reasons, did I do something against them? No, it just happened to be that I was the unlucky manager of the time.
I no longer work at that place and in my new position, where I'm not a manager by personal choice, I see a world more similar to the one you describe, simply because accountability exists, so the bad apples are fired when they start to cause problems.
This you describe is common here in LATAM