Interesting timeline and info, thanks.
So, my general feeling is that KQ was put on the back burner in favor of TWD. But, fast forward through TWD's resounding success, the increased Telltale fanbase, and higher anticipation for Fables as a result of the previous two items, combined with hype for TWD Season 2, and you simply may have a decision that boils down to priorities.
I think TWD's success might have surprised even Telltale. Two years ago KQ was something Telltale would have wanted to appeal to more adventure game fans and build up their repertoire. At that time they were coming off ToMI, Sam & Max, and just releasing BttF. Two years later the success of TWD has done far more for the company than they would have expected of KQ.
Quite frankly, Telltale doesn't need to do KQ anymore. Whether they want to would be a different scenario.
I could be way off base. Just guessing and thinking out loud.