> A major point of discussion when NIST announced the SHA3 finalist being Keccak back in ~2012(?) was that BLAKE1 at the time offered significantly better software performance

IIRC, Keccak had a smaller chip area than Blake. Hardware performance is more important than software performance if the algorithm is likely to be implemented in hardware, which is a good assumption for a NIST standard. Of course, SHA3 hasn't taken off yet but that's more to do with how good SHA2 is.

> BLAKE1 family is still considered secure today, its internal HAIFA design is very close to existing known designs like Merkle–Damgård, it isn't some radically new thing.

Given that the purpose of the competition was to replace SHA2 if/when it is weakened, choosing a similar construction would not have been the right choice.