They thought the engine design was the most marketable of RR's innovations. They have been pretty well funded AFAIK and have been flying the engine in a Long-EZ while a new airframe (spaceframe?) has been in conceptual design.
No reason the rotary recovery wouldn't work but it is a lot more complex than, say, the constant 250kt IAS glide used by other reentry vehicles.
d.o.l.
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