It did sell well, and they will do more D&D sets, they just won’t be “premier” sets (meaning, standard-legal). Presumably because they think they will sell better as supplemental sets. And they’re probably right about that.
Breaking down the market for D&D MtG sets you have Spikes who dislike AFR for what they see as it's weakness more then its flavour.
Timmies come for the Dragons and other big creatures, so as long as they aren't put off by the flavour, they could be fine with AFR & future D&D sets.
Johnny's might be mostly concerned about power levels, but attracted to the usual game play and chaos of dice rolling.
I think the biggest flavour backlash is coming from the Vorthos community.
Melanie's are probably the most divided group depending on how they feel about dice rolling, but also the group most upset about no party, level up, Sagas, Experience, etc... in the set.
There are two more groups outside the normal ones to consider too, and these two groups, plus Johnny's and maybe Timmies are what's keeping AFR selling well instead of tanking.
D&D fans, largely the group who is happiest with this set, probably the the biggest set of buyers I'm guessing, in large amounts.
Forgotten Realms fans are alot less happy with the flavour then D&D fans (there is over lap between this group & D&D fans, but they aren't the same thing), the names of many of the modal cards and some of the others are extremely unimmersive, there is no Elminster, and other beloved characters are absent, and the set is extremely light on lore, but there is enough FR lore, characters, and flavour to still get them buying the set in large amounts.
Making the set a Commander Legends/Modern Horizons: FR type product will do much to attract the Spikes, Johnny's, Melanies, and Timmies, will cut back alot on the complaining of the Vorthos and others who don't like the flavour mixing, and there will be more lore space for FR fans. D&D fans are the easiest to make happy, keep dice rolling, better dungeons, lots of D&D creatures/spells/items, and make sure to port it to Arena like MH1&2 cards are they will buy tons of it.