My understanding from them was, as much as I can remember it now, something like:
1. That yes, Fuchsia was originally intended, by at least some in senior leadership on the team, to replace both Android and ChromeOS. This is why Fuchsia had a mobile shell (or two?) at one point.
2. The Android team wasn't necessarily on board with this. They took a lot of ideas from Fuchsia and incorporated them into Android instead.
3. When Platforms were consolidated under Hiroshi it brought the Android and Fuchsia teams closer together in a way that didn't look great for Fuchsia. Hiroshi had already been in charge of Android and was presumed to favor it. People were worried that Hiroshi was going to kill Fuchsia.
4. Fuchsia pivoted to Nest devices, and a story of replacing just the kernel of Android, to reduce the conflict with the Android team.
4a. The Android team was correct on point (2) because it's either completely infeasible or completely dumb for Google to launch a separate competitor to Android, with a new ecosystem, starting from scratch.
To work around the ecosystem problem, originally Android apps were going to be run in a Linux VM, but that was bad for battery and performance. Starnix was started to show that Fuchsia could run Linux binaries in a Fuchsia component.
5. Android and ChromeOS are finally merging, and this _might_ mean that Android gets some of the auto-update ability of ChromeOS? Does that make the lower layer more suitable for Nest devices and push Fuchsia out there too?
Again, I was a pretty removed from the project, but it seemed too simplifying to say that Fuchsia either was never intended to replace Android, or always intended to replace Android. It changed over time and management structures.