Yikes, not true. I can't imagine developing anything of significant complexity with Lua. Also it hasn't been all-capitals for a while.

these tiny languages for MCU by design are not for 'significant complexity" to start with, even Lua might be too large and complex for "tiny iot devices".

For me, Zig and C will do it just fine.

Zig and C are much better at managing complexity because of their type systems.

Wouldn't a modern language with a great typesystem and a huge ecosystem be nicer to work with?

Other comments have put better than I could, but I'll add that what people call ecosystems nowadays is completely unthinkable in embedded. Sometimes you have critical applications and you bet you need to certify every single line of code that goes into your application. Small embedded devices are more geared towards engineering than other kinds of development, and in my opinion that's why applications work well, in comparison with the mess we have in the web nowadays, for example.

Nicer from which side? Not OP, but I do like modern languages and great type systems - I’ll be the first to say that TypeScript is fantastic and maybe one of my favorite typed languages.

However, embedding Lua and writing bindings for it is really easy to do. The entire thing fits in a nice, neat single directory of a few ANSI-stone-age-C files and “Just Works”. You can drop it into your codebase, write a couple of simple bindings and be off to the races in no time. And you can easily fit its world model into the model of your application. Lua’s simplicity makes it a very, very powerful tool.

Ecosystems are as much a burden in embedded development as they are a blessing. Either you put in the time to support much of it across all your Tier 1 platforms or you punt on the problem, defeating the purpose of using a language with an ecosystem in the first place.

Take Javascript, for example. Which APIs are you actually committing to support? Are you going to support the Date class? BigInt extension? Node's fs, path, and crypto libraries? The browser's local storage, indexed DB, and other high level APIs? What about setTimeout and setInterval? Or are you only supporting pure-JS libraries, forcing the user to do a manual review of each dependency they consider?

A lot of microcontrollers - probably the vast majority in circulation - wouldn't have the ROM to even support most of those APIs, if they made any sense on an MCU to begin with. Look at MicroPython to see the kind of tradeoffs they have to make - it isn't pretty.