1) The language is too unstable - something that might seems as a great boon is actually a big problem if you want to use the language for greater periods of time.
2) The tooling around it is not the best - problem with syntax support in IDEs, sbt is still a mess. Compared to modern offerings like Rust or Go it doesn't look that great.
3) Competition is quickly catching up - this isn't 2010-2015, Scala's competitors have been evolving quickly and picking up a lot of FP features (pattern matching HOFs, etc.) that made it stand out but at the same time offering a much bigger developer base, more mature frameworks, etc. A great example of this is modern Java but also Kotlin. Scala is still great but the gap isn't as big as it was a decade ago when Scala's popularity peaked.
And of course it is still hard to find and recruit competent people, especially if you go FP-heavy using Cats/ZIO and not Java+ style. Guess that's why we see less and less new projects written in it (and most of those probably are Spark) and in many companies it's becoming a legacy language waiting for a rewrite to e.g. Java.
"Scala will continue to evolve until morale improves"