It may be different with non-fiction but the Hachette imprint I work with/for does not have to be green-lit from above. Editors have full authority, and the last word as to what is published. I suppose in retrospect, post-publications, problems could arise but that would be after the fact, as in this case (I presume).
I would think that those at the top of Hachette would be aware of it now, but yes, all the subsidiary companies - they aren't small, they include Little, Brown, Hodder and others - act pretty much independently. They are complete companies in themselves. Hachette are an absolutely enormous publishing operation and would never get anything done otherwise.
So as you say, they would never normally require a green light from high up in Hachette for editorial matters. BUT I am still surprised this got as far as it did even within the division. There would still be a chain of command that would have agreed the editors could go to Mermaids and then back to the author as part of the editorial process. An author and chair resigning over something like this & the ensuing row would be a big deal internally. It's a very big fuck-up.