A lot of compilers for embedded systems are still C89 (with a few architecture-specific extensions).
Which systems, specifically?
Until recently, even MSVC was C89. I believe they only added some C99 features because the C++11 standard required them (in VS2013, I believe), and full C99 support only came with VS2015.
Yep, their focus is on C++ compatibility.
They have changed their view regarding C, but the actual work is customer driven.