Changing the subject ever so slightly something that has always puzzled me was the Flat 16 Climax engine. Why would a down to earth English Midlands company like Coventry Climax build such a complicated unit knowing that it almost certainly would never be raced? Makes no sense to me unless they knew something, had some plan which would have made sense but disappeared with the Climax withdrawal.
My understanding is that Coventry Climax intended the racing and road car engine division to be a profit generating business. Right at the start, Coventry Climax ordered parts for 100 FWA engines so they had confidence that they had something better than other manufacturers. The four cylinder engines were expensive but a better prospect than the alternatives. The 1.5 litre V8 engines were very expensive but every top team ordered them -- or the V8 BRMs. Sir Alfred Owen had told BRM that they had to make money selling services, chassis and engines several years previously. We can assume that the V8 engine businesses were profitable for both BRM and Coventry Climax.
When Jaguar shut down Coventry Climax's racing engine division, the "spares" were purchased by Bob King. According to the book on Royale cars history, the parts included the usual spares, unmachined components and major assemblies. Coventry Climax were down to earth but had invested a lot in running a professional business.
Why build a flat 16 1.5 litre engine? I can understand how the project might have kicked off. Unlike others, Coventry Climax had a history of delivering designs and the flat 16 had been peer reviewed by people with experience and history. Had a rethink and redesign been completed, the engine might have been more desirable and more expensive than the V8. But that is just what-iffery. It is more of a mystery to me how the project continued after Jaguar's acquisition. However I don't think we can blame it for Coventry Climax's withdrawal from motor sport; the racing division just didn't fit in with Jaguar's plans.