My experience has been that you don't handle it.
Either you are given freedom and trust to perform your work on your own and then you do just fine. Or you are micromanaged at all times and then you lose motivation to do your work well, begin to hate your job and finally quit.
Whether this micromanagement is present largely depends on the company culture and the person in question (your manager). Obviously you can't change the company culture. In most cases you also can't get through to the manager.
The management style has likely been adopted and practiced by a person in question for a long time. Somewhat over 35 years old and the game is over. The person is simply too old to learn and change.
Also most managers don't see the difference between software industry and the local bakery. They just don't get it why they shouldn't be doing this micromanagement but simply leave the team to do their job.
You can simply ignore it, disassociate yourself from the project and do it routinely for a paycheck. If it disturbs you and the other team members, arrange for a collective meeting and present you opinion as a team so that it won't be like the initiative of one rough individual. Or write a collective mail to the manager. If this won't work, either forget about it or find a better place to work.
Speaking of impact of micromanagement, I can say it can be devastating. Dropped motivation will only result in low quality work because nobody will care about things.
I had an experience with one micromanaged project. The team was completely demotivated, didn't know what to do and how to do it. The project lasted for a couple of years and didn't progress anywhere in that timeframe. I wrote about this story:
Micromanagement as a project risk factor