a) p2p matrix works pretty well as a proof of concept - you can try it from https://arewep2pyet.com; it’s not remotely vapourware.
b) funding has been spent on core Matrix dev and making Element kick ass (cf Element X)
c) an awful lot of very large Matrix + Element deployments (eg LuxChat in Luxembourg, Merkury 2.0 in the Polish MOD, many German local authorities) decide to run Matrix deployments without routing a single $ to support development at either the Matrix Foundation or Element, such are the joys of the Apache license.
As a result, we’ve had to pause some of the longer-term R&D. I very much hope that P2P will resume (especially if someone explicitly funds it) and the team is still at Element (but working on sliding sync and account portability). But right now we’re focusing exclusively on fixing the core problems in both Matrix and Element which others in this thread are complaining about. Hence Matrix 2.0, and Element X.