Additionally, the fact that the bug tracker, wiki, and technotes/milestones are all distributed as part of the same database is very helpful.
Unversioned artifacts have been added recently, which are helpful for storing and optionally transmitting build artifacts associated with the repository.
No multi-stage commit pipeline is much easier conceptually -- mostly I just want to commit the changes I made to my repository and automatically sync upstream.
The code is simple and easy to modify -- I added tarball support (in addition to zip; but I think DRH rewrote the implementation that is in use) as well as S/MIME signing of commits (in addition to GPG -- to use X.509v3/PKI for more robust signing)
I'd guess that the majority of projects are small development teams and this is the point of Fossil -- it works well for small development teams.
When the Tcl developers were looking to migrate from Sourceforge to a new system, they picked Fossil over Git for a couple of reasons. Ease of use was one of them.