After many years of programming, I came round to favour more inlining than I used to (I probably wouldn't go as far as some of this function, however).

Needlessly increased variable scopes - and thus increased risk of harder to follow cross-dependencies - is probably the biggest downside risk. But I've found code that executes linearly easier to read and understand when it's written linearly. When everything is factored into functions - particularly impure functions - you need to click all over the place to understand the whole.

If there are higher-level primitives that can be used - filters, maps, folds, etc. - then they can reduce the verbosity overall. Some monadic styles can flatten nested code by computing a pipeline / computation rather than having lots of nested loops. But depending on the language and the problem domain, performance may suffer.