1. in most cases they don't want to handle `InterruptedException` or `IOException` and yet need to bubble them up. In that case the code is very verbose.
2. it makes lambdas and functions incompatible. So eg: if you're passing a function to forEach, you're forced to wrap it in runtime exception.
3. Due to (1) and (2), most people become lazy and do `throws Exception` which negates most advantages of having exceptions in the first place.
In line-of-business apps (where Java is used the most), an uncaught exception is not a big deal. It will bubble up and gets handled somewhere far up the stack (eg: the server logger) without disrupting other parts of the application. This reduces the utility of having every function throw InterruptedException / IOException when those hardly ever happen.
This is true, but the hate predated lambdas in Java.
In my experience, it actually is a big deal, leaving a wake of indeterminant state behind after stack unrolling. The app then fails with heisenbugs later, raising more exceptions that get ignored, compounding the problem.
People just shrug off that unreliability as an unavoidable cost of doing business.
I think it comes down to a psychological or use-case issue: People hate thinking about errors and handling them, because it's that hard stuff that always consumes more time than we'd like to think. Not just digitally, but in physical machines too. It's also easier to put off "for later."