I won't go too far on whether I believe he has passed away or not, but his Mega account got nuked for "Gross Violations of Mega's Terms of Service" just before the news of his passing. If I were a dev and could list the reasons why I would abandon ship, one of them would be out of fear of legal action. From the point of view of someone outside these games, they might see this game (as well as several hundred others out there) as questionable. And when his Mega got nuked for ToS, it may have scared him into thinking that there was going to be some kind of legal hammer coming down on him, so he bailed out.
By no means am I trying to say that this is 100% what happened. The only things I know for sure are 1.) that this game's development has been stopped due to the reason posted on the OP (regardless of said reason's validity) and 2.) the developer's Mega account was nuked just before the Pro-Fan tier release date on SubscribeStar.
Anything and everything else is just speculation.