Don't get over-excited. This is pre-production concept art. You can't cancel a game that was never greenlit.
Reading the article, it sounds like Nintendo took the bits of this concept they wanted for TP and SS and dumped the rest. Not that either of those is unbeatable or anything, but I'm not 100% convinced this grimdark "becoming the master sword" story would have been any better.
This project was dead by 2008 though, so it does nothing to answer the question of what the main body of Retro has been doing for the past five years. What the hell are they up to?