Yes to your first question. This is why, when a company issues new stock (that isn’t a split) the value of all the shares usually falls by a greater level than just the value issued. For publicly traded companies the leaders of the company have to act in the interests of shareholders. So if they tried to steel away the company by diluting stock, or enriching themselves, they would be in breech of their fiduciary responsibilities. There are legal consequences for that.

For privately held companies (not publicly traded), this is a common trope/scam for small companies. There are far fewer protections for private shareholders.