Basically, Mercurial is migrating away from Python as its primary and core programming language. You don't say Git is written in Python even if Git were to have a few Python code (I actually don't know, never read Git code), would you?

The Python community agrees that in order to combat performance, Python developers would write C extension and/or compile code with Cython before considering a language migration. You can no longer say Hg is written in Python. You can't cite that in any of your conversation unless you say "was written in Python". This migration is to show that while Python's flexibility and dynamism are great, especially in the context of development velocity, Python is no longer Hg's first-class programming language of choice whenever possible. There is a limit as to how much you can get from Python. That's a blow, a temporary crying moment. I recognize this is cynical or entirely an ego thing. I am, again, to be clear, I am not criticizing the decision to move away to Rust - because I have an equal respect for Rust, but this announcement is nonetheless a sad moment to see another Python project moving away.

Sometimes improvements to a programming language stem from the limitations observed by a popular project (and equally by the large number of users).

P.S. On the other hand, moving CPython devl workflow from Hg to Git was a blow to Hg.