I guess, they had not enough funds to extend their staff with a team, who would take then-current version of the game, freeze it, and deeply refurbish the code without a need to permanently support and upgrade the main branch of the project, mixing desired and required.
This second team appeared in Seattle, but instead of refurbishing what's actually working without being hourly distracted by the current, actually playing customers, they did their own KSP, with kraken and kerbals, simultaneously being a reason for the new KSP owner to kill the working branch of development.
If the Seattle team did that small deed instead of swallowing the whole project, then several years ago the KSP-1 would be softly replaced by more developed KSP-2, and nobody but the developers would notice a difference.
Even more, they could provide Squad with money to hire the secondary team on their own.
Then some good people in Seattle would not get this job, but some other good people in Mexico would get it, and probably nobody would be fired at both places on the KSP replacement, as it would be actually one team.
A working game, unlike what the professionals did.
Noah built the amateur ark. Professionals built Titanic.