I think fits the US military's definition of Fraternization: A senior-subordinate relationship that is unduly familiar and does not respect differences in grade

I think fits the US military's definition of Fraternization: A senior-subordinate relationship that is unduly familiar and does not respect differences in grade or rank. They are strictly forbidden, and while they do happen anyway, they are also regularly punished when discovered. A personal relationship between a direct supervisor and their subordinate would be considered inappropriate fraternization regardless of how close together the parties are in rank. Fraternization is different from harassment. Among other things, consent is irrelevant. It also covers a broader scope than romantic relationships. The inappropriateness of the relationship comes from the disruption in the chains of command and responsibility, and the conflicts of interest that are inherent in the relationship. I think that the military is correct in forbidding this kind of relationship, because of the effects you mentioned. It doesn't have to be confusing. It just needs to also be considered inappropriate by the organization.