Functional languages really shine under parallel-processing conditions, but that wasn't a big thing at the time. Processors could handle multiple threads, but there was only one core, so only one thing could run at a time. Systems with multiple cores or multiple processors were rare and expensive.
C++ was the dominant language then and all multi-threaded programming (at least all the multi-threaded code I ever saw) used threads with locks to access mutable state shared between threads. No doubt there were some people who had better knowledge, but virtually all software developers at the time were either doing single-threaded code or writing C++ code using threads.
It wasn't until many years later (after 2010) did I slowly learn about immutable state and functional programming. Languages had evolved a lot in that time and functional programming overhead no longer mattered now that processors had become so much faster and had started sprouting multiple cores. We also have fastly more memory at our disposal, so we don't have to write code anymore that is super memory-efficient at the expense of everything else. Functional languages aren't performant enough to write an operating system in (and they usually don't allow manual memory management), but they're just fine for most applications.
Functional languages and the concept of immutable state have really flourished since 1995, now that the environment is much more favorable for them. Faster processors and more cores made functional programming and immutable state much more practical to use. I'm so happy that this is the case, because writing multi-threaded code with a shared mutable state was really tough.