The blue line assumes an average manager.
The red line assumes an average programming language/environment/framework etc.
When the complexity is bigger than the ability to manage it the ability to launch a working product in a timely fashion is gone.
The potentially very scary place is only potentially scary because the project might be finished by the time it’s reached. If good managing was applied the ability to manage complexity was probably maintained at peak level by choosing not to throw more people at the problem. Only at this point would it be surpassed by the complexity, if the project is not finished here the only solution is to do something drastic to decrease the complexity or increase the ability. Both are very difficult to achieve at this point which will make it very scary – unless you’re finished of course.
A good manager will become scared in the scary place, a bad one will not realize he is in it.
A good manager/team will not end up in the very scary place with a reason to be scared there.