It is not a core cloud service, it is a service for a niche industry that never met the hype it had and probably didn't get many customers.

I don't think discontinuing cloud iot provides any indication that compute engine is going away.

AFAICT cloud iot core was hosted mqtt, which is a thing others offer and you can transition relatively easily. I don't think the shutdown of it was catastrophic for any companies; the quotes I saw in articles were of the sort "yeah, that's annoying, but it shouldn't be hard to migrate to something else".