Need help with asset/equity beta interpretation

I understand that if you have a portfolio of stocks, the asset beta (or is it equity beta?) is 1 by definition because beta represents "risk for being in the market". If I take any individual stock, the asset beta measures that specific stock's volatility for every unit of market volatility. However, this individual stock's asset beta does NOT include "idiosyncratic" or "firm specific" risk because the market doesn't compensate you for what can be diversified away by holding a diversified portfolio.

So I'm having difficulty understanding: on the one hand we say "asset beta is the risk of the business/assets" but then we say it doesn't include "firm specific risk". Suppose I told you tomorrow the management of an industrial stock will stop all manufacturing lines for 5 years. By that logic would the firm's "asset beta" stay the same or change drastically? How can an individual stock's beta exclude firm-specific risk when in my head it seems it's precisely these firm specific things that drive returns (management ability etc)?