I didn't say anything about porting. I said - chapter 2.*imagination mode - on* Chapter 1 - ended. Complete game. Fully enjoyable Mable milk and Erica's lips. End of story. And next part - fully new. New engine( or new version, I dont have any knowledge about game maker and it versions). With same old characters, but - new game. *imagination mode - off*I don't think its that simple to just port over everything over to another engine for a new chapter. The art was most likely drawn at that resolution too, meaning he would have to upscale which is very hit-or-miss. Alternatively, he would have to redraw/redesign everything. With all that work, he might as well start something new if he is also kinda getting tired of the plot/setting.
As for art - I heard, many artists draw in higher resolutions before compressing pictures for engine standarts. And even with some resolution issues his artstyle will still stand out a lot.