>I know it's a difficult spot because such effort will also indirectly compete with their main product which is an IDE, so I'm not very optimistic it'll last.

I would say this if this step was taking early while Kotlin is still a new language in the market, but I think their late decision to develop an official LSP for Kotlin is because of reasons you just mentioned, but maybe they changed their minds because they saw other benifits including a wide adoption of Kotlin.