I got the original HHKB when it came out in 1996. The layout makes sense on Unix where function keys are not used much and you can use hjkl in Vim and in readline vi mode. The compact layout saves desk space and allows you to easily take the keyboard with you everywhere.

The HHKB was inspired by the original Macintosh keyboard which doesn't have arrow keys at all (not even via a Fn key): https://deskthority.net/wiki/Apple_M0110

But I agree with your point about shortcuts, and I later switched to full-size ergonomic keyboards due to RSI and for Windows use, and now despise keys being relegated to Fn combinations.