And now, a short and far from complete list of artists who were pushed off Columbia yet were not pushed into a "death spiral":
Charles Mingus, Ornette Coleman, Bobby Hutcherson, McCoy Tyner, Cedar Walton, Benny Golson, and several guys named Marsalis.
After Columbia, Woody landed at Bruce Lundvall's Elektra/Musician, which had great distribution and pretty good promotion.
The "death spiral" thing seems over-the-top.