Because being received well isn't what Microsoft are after. They're after making as much money, as (un-)realistically possible, even if it means shutting down things. This isn't the first, and definitely not the last time. They've had more than a handful of studios with iconic IPs, that got absolutely annihilated after acquisition
Being after well received titles is congruent with their Game Pass strategy. Being after as much money as possible would mean they probably should have charged more than $30 for one of the best games of the year.
Ten years to make one well received game. After two failed high budget titles, an attempt at a franchise, Ghostwire and a mobile game supported for only five months.
The studio head Shinji Mikami left shortly after Hi-Fi rush. So I would guess any projects they had in the works weren't interesting enough to justify the costs.
Just because the company you work for is making bank doesn't mean they won't fire you at the drop of a hat if they think they can make more by doing it.
So Redfall was set up to fail, and you make those people fall on the sword, and then Hi-Fi Rush is a game people clearly want more of and could have stood to cost more than $30, and you let those people go too instead of hitting the ground running on a sequel? What is wrong with you, Microsoft?
Going by MS‘s track record the last couple decades, it‘s all business as usual. It‘s expected from them to eventually close everything down they incorporate into their ecosystem. Sometimes after draining it or letting it rot away, and sometimes sooner than later.