Thank you for opening this discussion ! I was really afraid to propose this idea here...
So to add my view, that some might not appreciate, I would say that the first base of the game was not really a failure or a disapointement, but it was decided by the highest heads of Nintendo that MP4, with every possible artistical direction and code optimisation, the game would just look ridiculous with a release on 2020 compared to the very last 8th gen games and the coming trailers and demo of the 9th gen. So they scraped it to restart with a more powerfull structure.
Or a softer hypothesis : they scraped it because they wanted a full use of the capacity of the Switch Pro coming soon.
Good point, I never thought of the idea that maybe MP4 was going well, but they just felt the Switch wasn't up to handling their vision for it so they are restarting with more powerful hardware. However, I'm not sure I can agree on the idea of a mid gen Switch upgrade that plays exclusive games the Switch doesn't. I mean, that would be pretty hard for Nintendo to successfully market and sell. One of the biggest reasons listed for Wii U's failure is that the name made it sound like an upgrade not a new system, and most people aren't going to want to buy an upgrade of a system they already have to play new games. Upgrades of systems work best as a way for tech junkies to get their fix, not by being required to play certain games.