You have a Magento 2 theme created (at least you can see it in your IDE and we're going to assume there's no typo in the theme.xml nor in the registration.php), you can also see it in the Admin, and finally you have it configured for your store.

Then you go to the front end and you see a Frankenstein's monster: the CSS is okay but the Layout XML is not being taken into consideration. The front end kind of knows which theme to load, but it's loading it only partially.

What it's going on? How do we fix it?

One of the possibilities is that the theme is set as Virtual instead of Physical in the database, causing behaviors such as the described above.

Magento 2 happen to have 3 types of themes, of which I have found very little information in the official documentation (just a minor mention in the Troubleshooting section of the 2.0 "Apply and configure a storefront theme" page but gone in the 2.2 version of it) but a convincing explanation in this StackExchange question.

We have "Physical themes" which are the well-known themes such as Blank and Luma, second we have "Virtual themes" which appears to be themes that extend a Physical theme but doesn't exist in the files (nothing in app/design), and finally we have the "Staging themes" which I have no idea what they are nor how they behave (sorry).

These 3 different types of themes are defined in the Interface Magento\Framework\View\Design\ThemeInterface as 0, 1, and 2 for Physical, Virtual and Staging, respectively.

If you go to your database (using the Terminal, PhpMyAdmin or an app like TablePlus) and take a look at the theme table, chances are that you'll find something like this:

If you encounter a 1 in the type column for your theme, there's your problem. Change it to 0 and everything will be fixed.

How the theme became Virtual without anybody setting it anywhere?

You're probably wondering how that 1 ended up there without anybody setting it (at least you're sure you didn't as you just find out about all this).

As described, Virtual themes are themes that doesn't exist in the code, meaning there are no files for that theme (how Magento expect us to use this type of theme is for me unknown).

If you're using a version control system such as Git maybe (maybe) you ended up for a moment in a branch without the theme files and somehow loaded the front end or ran a bin/magento command. For a moment only, Magento saw in the database that a theme is set and active but found no files in the code for such theme, so it changed it to Virtual.