I can believe the new CEO is surprised since he just stepped in (including the previous months of negotiations) but obviously there are things that Linus hasn’t told him. And since most of the important people at the company are Linus year long friends, they had covered each other up.
And yeah, self harming to take a sick leave is fucked up, pretty sure denying sick leave to an employee in Canada is ilegal since there they actually give a shit about labour laws.