Much of technical work isn't face-to-face negotiation. Managers like that; engineers don't have much use for it.
This is the key question not only for engineers, and I don't think anybody has a good answer for it except for "we want to make more money and existing markets are already taken".
I guess the reality is that nobody – no matter if PMs, designers, engineers or anyone – wants to sit in a weird virtual environment, if instead they could just quickly join a zoom meeting. Who wants to put on a headset and stare at a dead-eyed avatar if you could just turn on your webcam.
And that's just the work part of it, I would assume that Horizon Worlds has even less recreational value.