Ah, here's what I was looking for

July 2015: "Those shits at MS...are they fucking with me?"

So, let's set a timeline HEAVY with speculation. Game was announced at E3 2014 without much notice. It skipped E3 2015, but showed up at Gamescom that year in August with an announcement of four-player co-op, which was shown off with a much rougher game in E3 2016's conference. The game was then cancelled soon after.

My guess is that, in July, Kamiya was told he had to rejigger the game into a four-player co-op thing. There were never any hints he wanted to make the game a Monster Hunter-like, but I am guessing people in charge of money were expecting him to do so. It gets announced, shown off, and the response is tepid. Changing tides at Microsoft, a desire to free up the UE4 team they put together to work with Kamiya, and being unhappy with the state of the game lead to it being cancelled.

If my guess is correct, that's really sad.