They seem to feel that they will be marginalized if Google stops paying them to set their default search engine to Google but, the way they have handled it is to focus on everything else other than their browser. At this point since browser engines are dominated by Blink and Webkit what exactly does Mozilla have? Their market share just keeps on going down.
Mozilla laid off everyone they had working on it. The project is still going on a volunteer basis, but it's obviously not progressing anywhere near as quickly as it was when it had people working on it full time.
Some parts of it, the parts that were production-ready, were merged into Firefox years ago and live on there. Other parts that weren't production-ready were canned and the staff laid off.
