It would not surprise me in the slightest if they underestimated the challenge of bringing Freevalve to market, but I think the main issue is the I3 engine itself.
The original Gemera concept would not have worked with the V8.
B Sport has a good video on how Koenigsegg completely changed the powertrain layout during development. Once the V8 became a possibility, the I3 stopped being a necessity. And for other reasons, too.
The market and regulatory situation changed. For a while it looked like the writing was on the wall for big internal combustion engines, with a shift towards downsized engines, heavy hybridization, and EV-only powertrains seeming inevitable.
That is no longer the case.
With EV adoption not progressing as quickly as predicted/hoped, the ICE got another lease of life. And in the performance car segment, customers clearly rejected EV-only and downsized ICE powertrains.
Considering all this, why would Koenigsegg keep developing an I3 engine that is neither necessary nor desired?
I think it's a bit of a shame, because I3 engines can produce an interesting and characterful sound. And, of course, it would be great if the Freevalve technology actually made it to market. It's hardly surprising, though, that Koenigsegg customers would rather have the big V8 and 900 hp extra.
If Koenigsegg actually got somewhere with their Freevalve technology during the BFG development, the obvious next step would be to deploy it on their V8. If.