Steven shared some development insight on Discord today, explaining the reasoning behind creating the Apocalypse side-project and the choice of battle royale game mode.
I think this statement sums it up pretty well:
"It only had to do with three things (Regarding APOC): Testing the systems we wanted to test, spending as little time as possible creating something to achieve the previous point, and getting it done in a timeline that allowed us to fix/change what needed to be changed before alpha/beta of the MMORPG."
And here is the rest of his message, where he explains more in detail:
"So, to recap the reasoning we developed APOC (or originally what we intended Alpha One Phase 1 to be), was to address concerns about combat, and specifically how we would integrate action combat into a hybrid combat system for Ashes. When we planned how to best accommodate this intent, we desired massive design date from skill usage, reticle accuracy, camera POV, high frequency player populations etc (long list)...