My latter point was that widespread title inflation has the property that if you "defect" and don't have title inflation it has an actual negative effect on you

My latter point was that widespread title inflation has the property that if you "defect" and don't have title inflation it has an actual negative effect on your future employment since it is nearly impossible for a random observer to know whether or not there was title inflation at your company. As meaningless as "CTO" is, having a title worse than that could be seen as non-meaningless as a negative signal.