Things change, and the change is not a indication of poor performance or lack of confidence on the side of any party involved.
Wearing my decoder ring I am choosing to interpret this as "We see there may be a decent market for OS 3.1 updates after all."
Could you elaborate on any future plans for this new 3.1 distribution? Is this a one-shot release? Is there any sort of roadmap? Are you testing the waters for demand before making that decision?
I also don't see the issue with any "conflict of interests" with Hyperion maintaining both OS3.1 and OS4.x distributions. The OS 4.x camp (which is basically A-EON) is creating OS3 software so surely they would be happy to see OS 3.1 updates.
Myself I have feet in both camps, owning both classic and PPC systems. Very happy to see updates on both.