I believe it is just lacking aggressive optimization. ARM is basically RISC as well, so it isn't an architectural limitation.
But I say this as a software guy who doesn't actually know CPU design.
It was then made public that LG bought a license right away.
It certainly is easy to casually spread fear and doubt.
But it is really far-fetched to think that the people at Tenstorrent, who have successfully delivered very high performance microarchitectures in other companies before, are lying about Ascalon, and that LG is helping them do that.
It would even be more far fetched to claim that Ventana Veyron V2, SiFive P870, Akeana 5000-series, all of them available high performance IP, are lying about performance.
Also we should not pretend that ARM is just going to sit there waiting for RISC-V to catch up.
Embedded is moving to RISC-V where they have low performance needs.
One example is the Espressif line of CPUs - which have shipped over 1B units. They have moved most of their offerings to RISC-V over the last few years and they are very well supported by dev tools: https://www.espressif.com/en/products/socs