Is mild credential embellishment from industry considered academic dishonesty?
I find it unlikely that your colleague got their academic assignment based on the role in the company. It is more likely that their contributions/research/innovation/pedagogic ability was recognized and they were offered the opportunity.

Don't generally assume that an advanced degree is an absolute prerequisite for academic affiliation. I know a guy who doesn't hold a PhD yet is the director of a major research lab at a prestigious private research university in the US. He simply "never got around to it". True and extraordinary merit is still recognized in academia, advanced degrees are just another (arguably easier) contribution to that merit.

That being said, I wouldn't call that academic dishonesty and embellishment is also a strong word for it. This could be labelled as inflation, because, as you said, their stated position is a bit 'stretched'. Unfortunately, such things are seen quite often, people feel the need to stress their influence and position. However, for the world outside your company, the distinction makes little difference, and for people who care within, your colleague either doesn't care or can plausibly defend the vague statements. From the standpoint of ethics, this falls arguably into a gray zone, where it is understood that it is not ethical, yet it is tolerated, as long as the stretch isn't blatant.