They should have been doing implementation and FSR duties. If they were doing core product development while on Federal Contract, the government owns that software now. If it hasn't been turned over, source and all, it could be grounds for an IG investigation.
That is very serious stuff, so I hope you can qualify what you mean by "serious software development".
As for FDE's doing sales, just look at the current job openings. The BD team is full of FDE openings. What exactly do you think those FDEs do on the sales team?
Since everybody who touches the customer has the same title (except for Mission Specialists), it's easy for Palantir to start a deployment with non-sales FDE's, then swap them out for sales FDE's and start working the organization.
It's sketchy, but it's super smart if they're careful about it.