Am engine is just a set of tools stuck together. If they have to write their own rendered, editor, interpreter/compiler, and everything else, that’s a ton of investment that you then can’t spend on game features. You don’t do that unless you have very good reason. You are also required to maintain them yourself. You don’t just get upgrades essentially for free as the engine updates.
Unity actually does have a lot of features that are useful for a city builder, like ECS. I don’t know if you’re trying to be sarcastic.
The performance probably didn’t “sneak up on them” but they almost certainly didn’t know how it’d end up. There’s likely still a lot of optimization left in there and a lot of optional things that can be enabled/disabled. There’s no way to know how the end product is going to look until you’re nearing the end and all the pieces come together and time starts running out.