Is mild credential embellishment from industry considered academic dishonesty? One of my coworkers has a part-time academic/research position at a major university where they supervise PhD students and postdocs even though they do not have an advanced degree, or a degree related to the field where they are working.

Their listed credentials on their profile prominently include two groups affiliated with our company and they are listed as a 'founder' or 'co-founder/lead' on both. This is probably an embellishment of their role, which was mostly junior, but with a fair amount of administrative/coordination work. They also changed the name of one of the groups (which is internal to the company so not noticeable by someone outside it) to sound more broad than it actually is. 

Technically I could see an argument for either title since the terms are kind of vague--'founder' since they were one of the members when each group was started, and 'lead' since they did some coordination work. But the overall role did not involve technical, thought, or academic leadership and this is hard to describe without revealing internal company information. I am concerned that they are passing themselves off as a thought leader in this (emerging) field, but wonder if my concern is overblown.

Is this considered 'academic dishonesty', or 'unethical'? Or is this normal for people coming from industry (as opposed to a direct academic pipeline where one is a grad student, then a postdoc, then an assistant professor, etc.)
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.