One of the main reasons I went freelance was because I (IMHO) am a terrible manager. Not that I'm mean--it's the opposite. I find it hard to realistically assess what a person is giving (or not giving) to the company. You talk about being an empath a lot, ZG, and I think that was my problem. I would stick up for staff no matter what, even if they really should have been corrected. I don't know if my ACOA (Adult Child of Alcoholic) experience was also at play--I find it very hard to trust my own gut when it comes to other people, which sometimes puts me at a disadvantage when it comes to healthy relationships--work or otherwise.
I echo what others have said. Thank God you didn't get involved in that recommendation. Yes, just move forward.