I can't agree with the second sentence. I think you are unfamiliar with what Activision did to Denis Dyack. They continued to give him money in order to completely destroy his reputation; they could have cancelled the game, but they didn't.
Treating Miyamoto in such a manner will take him down a few notches which in turn will give Nintendo an opportunity to put younger developers into the spotlight. This way Nintendo also gets around the inevitable concerns about what happens to the company once Miyamoto retires. There are clear benefits to wasting money on this Star Fox game, especially because a good chunk of the workload isn't done by Nintendo's inhouse teams, so Nintendo's most precious resources aren't affected too much.
Although I have to say that this theory sounds too malicious to be true. But at least it makes more sense than "allowing Miyamoto to save face" because the game isn't shaping up to be a hit.
Why would they purposely do that to Miyamoto, who's not only an all-time great creator, but also a mentor to the young devs who are preparing to become future faces of Nintendo once he retires? He's still doing whatever he needs to do to get them ready. Thats why he's given the title of Creative Fellow, to cover all the upcoming projects that are being made by Nintendo and its affiliates and help developers when they need it. That's a terrible way of going out.
The answer to your question is in the post you quoted. Besides, it would also serve as a great reminder to young developers that nobody is infallible, thus keeping their egos in check. Additionally, nowhere did I say that this would be Miyamoto's last project.