Its definitely loss of interest. "Making one of the biggest VN's of all time" is good in theory, in practice its complete bonkers. There is a reason people don't make the biggest VN of all time. Burnout, plain and simple. Bluecat might like making the game, he might be passionate about it, but all that means jack shit when you don't have any interest in doing it.
The last 2 years have been a big clue that he is either A: Lost all interest in it but is still very slowly grinding away to at least try to finish it. B: Lost interest, doesn't want to work on it, but is still delusional enough to think that this will be finished when in reality it will be abandoned or cut down to 6 months instead of a year.
There is no way in hell he will recover. There is only 1 way for him to do that and that is release consistent updates on time. Guess what? He already failed that. He released 1 update in 2 years and then we get a release date, which Bluecat said will have a playtester version by end of July and the update will be in the 1st or 2nd week of August, and its now the 24th.
That right there is why he won't recover. At this point he could tell people that the sky is blue and the grass is green and people wouldn't believe him. Words are words, actions are what matters. Bluecats actions are worth more than all the words he has said in 2 years.