I'm pretty familiar with a lot of Zed's doings but I had missed this one. I doubt it impacted the adoption much, losing one advocate like that isn't going to doom your project.
I finally gave Fossil a serious try last year for a few months, just on my own but I don't think my opinions would change if I tried in a team setting. I still love the idea, but the execution is... ghetto. Serviceable, certainly, but ghetto is the best overarching description I have for it. You have to be willing to look past a lot of things, sure many of them are petty, in order to take it over dedicated polished services for the things it combines. And git+[choice of issue tracker]+[choice of forum]+[choice of wiki]+[choice of project website]+etc. is the real competition against Fossil, not git+nothing, so even if it was better on the pure version control bits it would still be a tough battle. (Not to mention the elephant git+github is a pretty good kitchen sink on its own if you don't want to think about choices and have something serviceable that's also a lot less ghetto.)
I also realized how much I love git's staging area concept once it was gone -- even when I had to use Perforce a lot, at least Perforce has the concept of pending changelists so you have something similar. I've never been a big fan of git's rebase, but it's also brought up a lot as a feature people are unwilling to give up, and I see the appeal. In summary, I think the adoption issue is just that people who do eventually give it a shot find usability issues/missing functionality they aren't willing to put up with.