What happened with this?

Didn't get funded.

Inafune said they'll fulfill the obligation to release it after Comcept got bought out by Level-5. Of course, since it was allegedly funded by a shady Chinese company, who knows if it'll actually happen.

>>389294807
The game failed to get funded on the Kickstarter, but some outside entity apparently ponied up the cash for it.
However, the kickstarter for the Red Ash Magicicada animation was barely a success (and actually looks kinda cool).