I think it was a combination of a lot of things:
a) I think it became increasingly clear that Mgbako was going to be back for his sophomore season; I'm guessing that wasn't in Liam's mind before committing to IU. Not to say those two couldn't co-exist on the floor together, but lets be real, that directly cuts into LM's PT and role
b) Things got very toxic around IU basketball for a 3-4 week period in late January/early February. Woodson was going to be fired, the entire team was going to transfer, etc etc. Recruits aren't dumb and with much of IU's dirty laundry being aired over social media, I'm sure it played a factor. The day it was announced that Woodson would be back for year 4 was the most toxic and divisive I've ever seen. McNeeley de-committed the next day.
c) The offense was miserable last season and Liam would have been blind not to notice. Having second thoughts about playing in offense that Liam may not have felt tailored his skills could have been a dealbreaker.