Fewer people will walk when infrastructure prioritizes drivers and makes it uncomfortable and unsafe to walk. This isn’t the only option.
Cars being built for pedestrian safety is one piece of that picture. As you note, impact safety falls into this category and provides limited benefits for collisions at speed. There’s a lot more to that story though, as we can see in societies that value pedestrian lives. Automatic braking and avoidance, driver attention monitoring, and speed limiters are all options. Add in safe infrastructure, safety enforcement, etc.
There’s a broad range of tools available to reduce pedestrian deaths. None are perfect, none apply universally, but we should consider all of them.