If in fact that were the case, there would have been a lot more people going away, not just the CO. Something tells me it might actually be worse than an SBA on ORSE. I’ve seen CO’s who have failed (or SBA’ed) one, got a BA on the next, and still managed to keep their commands.
If it were for an ORSE / NTPI or some such, the XO and engineer or weps officer or ops officer would be gone as well. My guess is that this is about command and not just some lesser thing.