Okay so i just tested it out for 3 months. I subsidized my Office Industry to give them more profit.
BUT the ones that are at 5/5 employment and say its low profit never change with the game tax dynamic.
In fact my office profitability went down from 72% to 68% with the reduction of all taxes completely. I went to -10% and started subsidizing them.
The game is definitely bugged. I tried fixing it with manipulating taxes and it did nothing for profitability in the ones that were stuck.
When i switched up the taxes the ones that weren't stuck did level up quicker.
When i demolish the building that are stuck at 5/5 employment a new building pops up with higher employment. I did that with one building.
But that means it has to level up again and it takes time to level up like that.
It's more complicated than that. You also have to look at how many other office companies provide that service and compare that to what is actually needed in your city (do offices export their service to outside connections? I haven't seen this happen but may have missed it). If you have more offices providing that service than what is needed, some will be unprofitable. No matter how low the tax rate goes, they still won't be making a business profit and therefore won't grow or hire additional employees.
Your newly established business is full of employees because they are a "resource" for offices. If it's the same business that was there before, follow it over time to see if the number of employees drops over time.
I'm not saying the underlying simulation isn't bugged. Just saying you can't look at the top level and make assumptions on everything else. That's like reading the headline of an article and thinking you know everything the article contains.
I would assume you are zoning offices because the demand bar shows a need for them. It's possible the demand bar is bugged. Or, it could be that a specific type of office is needed and the demand bar is very generic. Then when you zone, maybe you get a mix of office types with some not needed. Then there is the case that higher level offices have more employees and produce more of the service. So, when one levels up, it supplies the amount of service that two businesses used to provide thereby making the second business unprofitable.
The underlying mechanics of the game are supposed to allow for unprofitable businesses to go under and the building to become empty. Maybe that isn't working as it should and you are seeing zombie companies filling those buildings.
*whew.... that was a lot to type. TLDR - we need to dig deeper into the simulation to make statements about the game being bugged and it's not us confused over how it works because we aren't seeing immediate changes to our decisions because everything takes a lot of time to play out like it does in the real world.