IIRC originally neither mercurial nor git would scale enough, but mercurial was much more willing to accept scalability-related patches, so long as they didn’t harm the more common small-scale use-cases. After a couple of years of submitting patches for moderate improvements, meta wanted to make some more controversial large-scale changes like dropping support for sequential commit numbers, and ended up hard-forking and breaking compatibility to do that. That incompatible-but-better-performing fork then stayed internal for a while, before recently being released as Sapling.

As a bonus, part of the rewrite of the internal storage engine involved creating a storage engine abstraction layer, which in turn made it easy to add Git as a backend :D