I agree to you with the general sentiment. That said, Rust is not a functional language per se; the degree of functional decomposition is thus fundamentally limited. This is partly because it tries to be efficient, and as arielb1 pointed out, ownership sometimes makes it worse.

> It's not clear how you'd factor code out of a nested loop without understanding the whole thing, [...]

You are right, loops are particularly hard to refactor. I still argue that my code is better (barring any future expansion) because it fits within handful lines; you cannot easily understand 100 lines of code with the cyclomatic complexity of 1, but you can often easily understand 10 lines of code with the cyclomatic complexity of 8 (e.g. triple loops). The size of code, syntax and contextual information matters as much as algebraic laws.