The "movie deal" is for something direct to digital, live action. It's the equivalent of a made-for-TV movie. There's just no way they made much money on that, and while they could have spent it just on a Red Ash pitch, it makes more sense to spread it around to many different pitches.
The pitch they did make was a crude animatic with voice actors. It wasn't remotely what was needed, but it would have cost a fair amount. They spent money, they just spent it badly.
That said, I'd still argue that this idea that having a "convincing prototype" is necessary for kickstarter is ugly and bizarre. Yes, Yooka Laylee had one and it was lovely. Many successful kickstarters hadn't. Bloodstained had nothing but IGA walking around on a movie set (a waste of money that could have been spent on game content, IMHO). Among the many blunders of this campaign, I don't think that one of them was that they had no protoype to show.
The FUZE funding is downright bizarre. They are very very far from an ideal investor. They're weird, dude.They're the weirdest investors this side of an Ed Wood production. A Chinese company that wants to make consoles showed up after the kickstarter had started, saying that they'll fund the game (including for consoles other than their own) because they want to have something lined up for their "revolutionary" new console now that the ban on consoles in China is over. I really don't think it's fair to point at something that bizarro and conclude that Inafune could have gotten traditional funding all along. Maybe, but the FUZE deal is frankly NOT what "traditional funding" traditionally looks like.
I'm more inclined to think they went in with good intentions but terrible planning, dug themselves deeper a few times, and were in panic mode when a frankly peculiar investor showed up with an offer they couldn't refuse.