Your conclusion presupposes we buy into the "keto diet is healthy" proposition.
However, there is a preponderance of real data that fats have been demonized by the sugar industry in the past, and HGI foods (high-carb, generally) are a bigger issue.
It wasn't killed off. Support was removed from Chrome, for what appears to be rather spurious reasons, but practically everyone else are busy implementing it.
While I'm not the biggest fan of WebP, using generation loss as a metric wouldn't be an indicator of a real world scenario. I can't think of any actual instance where an image needs to be re-encoded, say, 10 times, let alone 100+ times.
While certainly an impressive effort, it's not even close to competitive yet. As is pointed out in a comment on [1] and as can be seen from the rat piss yellow in the sky, the algorithms are very much on the naive/simple side of things.
I'd be surprised if they have to go through the same review process as everyone else. And even if they do, the reviewers are likely to give them a pass because it's Google.