This is true in the Navy and on merchant ships. There are ways to remove a captain for cause, but the bar is set very high.
If you read any literature pertaining to ships and the sea, experience with crazy or malign captains is likey a top seller for about 3,000 years now
A recreational skipper with volunteer crew is fairly limited in ability to be a farging icehole because his crew will just get off and not come back. In this case the first chance to do so was 2,000 miles away, which IMHO led to some tension onboard. I have a chance myself to do an ocean passage on an unknwon-to-me boat and N F W will that be the first time I set foot on said boat. One thing I found that works is I trsut my watch captains 100% and let THEM deal with day to day annoyances if possible.
EDIT: 2 things I would like to NOT see - Threatening to stalk people in real life and publishing private emails that were not intended for public consumption.
This sounds like an awful experience.
I do have a few questions/observations.
First, I wonder what the basis for liability was, and how the insurance played into it. It would not surprise me if the $6M was the limits of the owner's policy. Was there a finding of negligence? Or was the crew member covered as an additional insured? Incidentally, these types of settlements are typically covered by confidentiality restrictions, so please don't respond if doing so would open up that can of worms ...
Second, I think this is a red herring, when it comes to the question of the captain's authority. Liability for injuries suffered by a crew member is certainly a concern for any captain, but that is a very different thing than the question being debated here, which is what authority does the captain have to make decisions and run the boat.
As to the latter point, my personal view is that because the buck stops with the captain (i.e., the liability issue) that the captain has (and should be afforded by the crew) a great deal of latitude in the exercise of his/her authority. On the other hand, that authority can be wielded in different ways, from acting like a dictator to soliciting opinions of everyone involved. Personally I prefer the latter approach -- I want to earn the respect of my crew (and learn from their experience and opinions), not demand it. This was the way I was raised and I think it works much better than acting the tartar.
I also don't think the Captain's authority is absolute. At some point if the Captain is making decisions that are grossly incompetent or erratic, to the point where the boat/crew are in serious danger, the Captain's authority is and should be diminished.