A very experienced dev-team, Milftoon, sets out to make a 2d project. They somehow "forget" to rigidly contract the artist for the duration of the project? Further, there are no other artists available to carry on?
I played MD from the very start. Characters had greatly changed looks throughout including the main ones Joey and Linda. So, changing artists is at least plausibly doable.
So, the argument that MD couldn't possibly survive without Inusen seems too extreme.
An outsider, myself included, often convinces himself that the known parts of the puzzle are enough to adequately solve the puzzle, basically ignoring all unknown parts. Especially when people and money are involved that is just not so.
As mentioned, Milftoon has a very long history of nuking projects. I wouldn't be too quick to buy an alibi from them.