It's not that bizarre. It's path dependence. They have an existing codebase with hundreds (thousands? tens of thousands?) of person-years of effort contributed in python already, so a complete rewrite would be too expensive to consider.
Awareness that organisations often end up in these problems should be considered when choosing the language for a green field project.
As I understand it, Instagram is a python codebase and (guessing) may be the primary motivator here.
Probably the first, say, 100 person-years of effort poured into the Instagram codebase were done at a time when product development velocity, not performance, was the main priority.