Re-write entire product from scratch?

Background: I was the lead developer on a product team that was acquihired by a large corporation. The merge with the new corporate team was a fiasco and I quit. My old co-worker who took over my position told me that the new corporate team has decided to completely rewrite my old product from scratch.

Ive never experienced the need to completely rewrite something from scratch in my career. I can’t imagine there would be any reason to rewrite a product that is turning a profit. The project is very “complete” with everything from 95% test coverage, complete CI/CD, complete API documentation, specification docs, and active users as well. And there are still 5 ( of 15 ) developers from the my original team still working for corporate.

From what my coworker tells me the corporate devs started rewriting all the same services and APIs that already exist in the same languages with no real significant differences. There is a rumor that the some of the major customers are about to drop the product due to bad support & customer relations ( most of us quit because of COVID and frustration with corporate they also didn’t hire our old marketing team. ) He also says the reason behind the scorched earth approach is “because they think rewriting it will allow them to really own it.”

I’ve never had to make the decision about whether or not to rewrite a product from scratch. What are the circumstances when this should be seriously considered? And what decisions have you made when faced wIth that choice?