Metroid isn't a very important IP in terms of attracting a wide audience; the core Nintendo fanbase are not very big fans of those types of games. It is an important IP to certain very loud fans. If Nintendo outright cancelled it, they would get incredibly bad PR by those very loud fans. Similarly, Retro is a highly overrated studio by mostly the exact same loud-Metroid fans. If Nintendo shut down Retro without proper justification, they would get similarly poor press from those loud fans.
A win-win situation is to give Retro Metroid Prime 4, see them fail with it, and then close the studio with little to no backlash. Also, top brass are not the people who created the game, they're the people that managed its production - and from what I heard of the original Metroid Prime games, it was a fairly horrendous production.
None of the Metroid Prime 2002 design team remains with Retro. None of the lead or senior artists or engineers are with Retro (or Nintendo). Six Retro studio artists and engineers (none of them leads or senior staff in the Metroid Prime era) were onboard with Retro for DKC Tropical Freeze. There are many times more former Retro devs (from the MP era) in Armature Studio (https://www.mobygames.com/company/armature-studio) than there are in Retro, and the ones there played far bigger roles in the development of Metroid Prime than anyone currently in the studio; since it is a studio containing the majority of the senior staff from the Metroid Prime dev team, while Retro currently has none of the senior staff.
If Nintendo really wanted to give the game to the studio most familiar with Metroid Prime, they'd go out of their way to get Armature Studio to do it.
I know you don't want this to be true because you're a fan (and I admit, I'm not), but you have to question Nintendo's motivations for putting the game in Retro's hands when they clearly don't have the staff for a high-end FPS on the Switch.
First of all, I 100% admit that I don't have the list of people who are still with the company on hand, but its much higher than 6 people. I remember because a VGCHARTZ mod posted it the last time this discussion came up, I can try to find it if you want. Though if we're being honest, nothing will change your opinion. I'm not sure why you posted rebuttals to what I'm saying when I specified top brass, something you acknowledged, unless you are just making a specification that I didn't need? I can't say I think it matters much whether the majority developers themselves are the same or not, seeing as how Armature is busy making mediocre games, something you conveniently left out. It's funny to see people constantly clamoring for new hands to takeover Nintendo, for new blood, but to see it as a negative thing for Retro. The point wasn't that Retro do have a majority of the old staff (again even said the top brass), but that there is a weird knack for believing only negative rumors regarding the studio.
Second of all, look at the reception Retro has gotten by enlarge. Nintendo already have the ammo they need to close the studio off. Donkey Kong Country Tropical Freeze got a lot of flack for seeming unambitious to many people, and a lot of fans were disappointed that was the project Retro decided to work on. On top of that, they haven't released a new game in 5 years. There is no reason to believe Nintendo would get massive backlash for such a move.
Third, this argument makes literally no sense. Nintendo would self sabotage and spend millions just to close a studio and release a mediocre Metroid game? Ok, lol. Companies don't spend the time and effort just as an excuse to close something. If there was a time to pull an unpopular move, it was after releasing a critically acclaimed title, to buffer the affect. Not after releasing a mediocre title in one of Nintendo's most acclaimed series. Don't get me wrong, as I said, Metroid isn't that important unfortunately and it doesn't sell units. But that's why it makes much more sense to cancel a game and studio when there isn't attention on it. Metroid fans, as rabbid as they are, would blame both Retro AND Nintendo.
And honestly I'm not really a fan of Retro. I've gotten Tropical Freeze twice, once on Wii U and once on Switch, and both times I couldn't get into it. I love Prime 1, but it's the only Prime I played for an extensive period of time. I'm also not a big Metroid fan because I simply haven't played many of them - Prime is the only one I finished, though I love the aesthetic and admire the franchise a lot. What I have a lot of confidence in is Nintendo. That's the basket I'm putting my eggs in. Retro is a means to an end, although I would love for them to be great as well simply because Nintendo could use as many good studios as they could get. But if they have gone bad, close them.
I can appreciate that someone having an extraordinarily biased point of view doesn't mean they can't bring up great arguments. A fanboy can make them, and so can a hater. That being said, I don't think any of these are even close to good.