one of the killer issue with bosses is the unreasonable demands, some bosses overpromise and then put pressure on the team to deliver without understanding of the situation, this happens when you have a boss who has no idea what you guys do and how you work . this is very demoralizing as you have mentioned.
on dividing the team and having favorites could lead a team to fall apart, used to work with a collegue who left his former company cause the boss had a favorite staff and nomatter what wrong she did , she would always get away with it, this made it hard for the rest of the team to lay ball so he decided to leave the company
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I did similar thing before, I quit my job because of another bad boss