From a completely commercial take, I actually don't think it is scandalous that Tango Works is being shutdown by Microsoft, in that a game they pitched(HiFi Rush) for this gen; despite being well loved could have easily released on a 360, X1, too with that art style. and unlike an Angry birds money maker, the game just did as expected AFAIK from what looks like a title filling a Jet set Radio Future slot in a games line-up.
And that's sort of the bigger question IMO. If they thought HiFi rush as a technological last gen looking game would do amazing and standout when they pitched it, to what extent does that studio have the technological makeup and self awareness to make tent pole games, best in class for this gen, for Microsoft Games Studios to publish?
The game may have been everything Xbox wanted originally from OG Xbox devs with that arcade soul they sought to understand and recreate by originally having arcade units for recreation breaks in their HQ, but without HiFi rush having massive commercial success it seems that doesn't register with Microsoft Games, now. It is harsh, but fair IMO.