This sounds like dev sour grapes but what the company was asking them to do seems better from the customer pov and for cyber security I'm general.

As a developer myself (though not on the level of these guys): sorry, but just, no.

The key point is this:

[...] we did not issue CVEs for experimental features and instead would patch the relevant code and release it as part of a standard release.

Emphasis mine. In software, features marked as "experimental" usually are not meant to be used in a production environment, and if they are, it's in a "do it at your own risk" understanding. Software features in an experimental state are expected to be less tested and have bugs - it's essentially a "beta" feature. It has a security bug? Though - you weren't supposed to be using it in a security-sensitive environment in the first place, it sounds perfectly reasonable to me that it should be addressed in a normal release as opposed to an out-of-band one.

We can argue if forking the project is or isn't extreme, but the devs absolutely have good reason to be pissed. This is typical management making decisions without understanding technical nuances and - from what is being told by the devs - not talking it through before doing it.