The "anti-woke" (or whatever they call themselves) hate is absolutely ridiculous, and anyone who takes it seriously is an idiot.
That being said though... The show was just bad. Nonsensical or missing character motivations, a thin excuse for a plot, and a huge disappointment compared to what it could have been.
I really hope the reactionary hatred didn't factor into the cancellation, or at the very least that Disney doesn't take away from this that they should hire fewer women and people of color. I hope they take away to invest more into better writing.
FWIW, they ran a survey prior to the cancellation asking if people watched the whole thing, what they liked, what they didn't like, what they'd like to see in Season 2.
I expect those survey results had more to do with it than anything else.
The merchandise getting pulled was probably for tax reasons. If your going to write off the entire project as a loss you don't want anymore revenue being booked to it. Same reason Disney memory holes some streaming shows when the numbers don't survive.