They went whole-hog on the metaverse and their customers rejected it with a resounding "no". If they stop now they can probably make a full recovery. The fear is Zuckerberg is far too stupid to do that. In any other company the board would have terminated him several quarters ago. He is smart enough, however, that he allowed the board absolutely no power. So he is a Benevolent Dictator for Life and due to this it's entirely possible his own hubris will run Meta directly into the ground.
On its face, VR seemed like a good distraction. The tech feels like it's within grasping distance, and it presented the chance for them to appear leading-edge and cool again. The problem is that they went in too fast, at huge expense, and have not been very good with messaging. Thje fact people are conflating whatever mess Horizon Worlds is with their entire VR vision is a crime of messaging as much as anything.
TBH, VR today is where home computers were in 1979. People are buying them, but as hobbyists and enthusiasts or novelty seekers. The market is not mature yet, most of what's available sucks for a wide variety of technical and learning-process reasons, and we're still waiting for the real killer app that makes previously uninterest consumers storm the Best Buy. Meta probably doesn't have it in their plans. Hell, Apple and Valve probably don't have it either. The industry needs to get to the VisiCalc moment, and I suspect the way to do that is to stick to cheap, rapidly iterating hardware, and focusing their efforts on dev support and maybe some infrastructural stuff, rather than trying to headline the software market and ending up being the butt of jokes about "legs coming soon".
That would leave a lot of cash in the coffers so that when they see things that look promising, they can just roll up dump trucks full of cash to developers. Let them be the R&D because they're not going to be beholden to whatever constraints your internal teams have.
If by metaverse you mean the Horizons app, sure. The money is being spent on the hardware, though. VR
I'm 100% sure it will be "fashionable" again but the question may be if it will be able to stay alive and able to adjust long enough. I'm surprised they aren't trying to morph one of messaging apps into western "weechat"