This is also what happened. Larger blocks was implemented with segwit. This played out during an infected debate that provided the perfect cover to launch an altcoin without it, that changed the name and some constants in the code. The free PR gave them more economic activity from the start compared to similar coins, and was likely quite lucrative.
Increase the block size limit was really just a 1 line change, a single variable within bitcoin core controlled it. Instead of changing this variable from a 1 to a 2 they chose the convoluted mess that was segwit. What was so wrong with increasing the block size limit the normal way?
This was thoroughly debated over many months at the bitcoin-dev mailing list so it would be presumptuous of me to summarize that now. The list is open and anyone can read the actual back and forths that took place.
There were several perspectives on this, including that no one found a way to deploy that protocol change to a live network in an acceptable way. It is much easier to build consensus around "soft" forks.
