In situations like this, I think the person at the top of the chain that told employees to perform the illegal installations should be arrested and charged. On top of that, the company should be fined into bankruptcy. If the directors knew about it any companies they're involved with shouldn't be allowed to conduct future business in the municipality (or state).
Most likely the feds said they will tie up whoever challenges them in federal court. They can play jurisdiction fuck fuck games and then flip between it being a search, it being necessary for safety, that the city/county was obstruction a federal investigation, and all other nonsense.
Don't think your company could just put up cameras and post the location of LEO and they'd let you get away with something like that.
This sounds like some sort of legal procedures adopted from the USSR.
But this type of thing (surveillance cameras) would actually fall under state security and be ordered by the Central Committee and done top down without any comments anywhere along the line (because everyone understood what was good for them).
You're probably thinking of the "we're making the wrong type of tractor ball bearings"/"we're making broken consumer radios" type of issue where yeah, they'd give you the runaround.