I'm not sure if this was the up front reasoning but a lot of lua code is run in situations where you don't have full control over the runtime or distribution method.

So anything that requires C libs would automatically rule out fennel for a lot of projects that are essentially using someone's lua api as the target platform. Roblox, mud client scripting, openresty, that sort of thing.

And these environments usually have so much added to them, pcre, stdlib extensions, class systems etc fennel works best not making any assumptions about any of that. It's just straight up the lua semantics, and so anywhere lua works it works. I've used it a lot and originally recoiled from this decision but now I think it is genius.