I think if it was not for the convoluted Revlog [1] format (which makes it impossible to do a clean-room reimplementation of Mercurial Core), we could see a bit more of adoption by having third-party libraries to interface with Hg repositories. It _might_ have been one of the reasons Git, not Mercurial, was added to TFS [2].
1: https://mercurial.selenic.com/wiki/RevlogNG
2: https://hglabhq.com/blog/2014/1/17/mercurial-support-in-tfs-...