I feel that the reason IRV was repealed in Burlington, was because an independent won, which was not palatable to either the Democrat, or the Republican political machines.
The system worked exactly as intended, the people who usually hold power felt threatened by it, and engaged their political machinery to restore that power.
I don't live in Burlington so I may not have as much background on this as a native would, but my impression is that the Burlington election showed that strategic voting it's still a problem with IRV, contrary to what its supporters generally claim. The Republican voters would have preferred that the Democrat won over the Progressive, and they could have caused that outcome by dishonestly ranking the Democrat higher on their ballots. Thus, the purported benefit of IRV of allowing you to honestly vote for your favorite candidate first while still taking your second choice into account was discredited.
The problem with that kind of strategy is that you may be giving away the election to the Democrat.
You don't actually know, at the time that you cast your ballot, how everyone else will vote. This kind of strategic voting is difficult to reason through, and incredibly likely to backfire.
Regardless of whether anyone actually votes strategically in practice though, it seems pretty understandable that people would feel disillusioned when they see an outcome like this. Most IRV supporters say "you can honestly rank your preferences among all candidates without worrying about throwing away your vote"...and then the Republicans in that election ranked their preferences honestly, and it turns out they threw away their votes.
As you point out, it's harder to predict whether you're throwing away your vote because it's harder to reason through the effects, but I think that's just going to make even people unhappier with IRV and generate even worse election outcomes. At least in FPTP you can usually tell what the best strategy is in advance, so if you throw away your vote you only have yourself to blame.
As a former Burlington resident that participated in that election this whole case study is a travesty - the baby was thrown out with the bath water.
Essentially what happened is that the person who was the 2nd most popular in the first round ended up overtaking the Democrat, so it wasn't a wild swing or anything... but after that happened the winner turned out to be a terrible person who was removed from office, then the two major parties lobbied to get IRV thrown out with the bad mayor and managed to get the majority on board.
As I've mentioned elsewhere, it's essentially like looking at Nixon/Clinton/ye favorite impeachment person and saying... "Welp, we're impeaching Nixon, so I guess this Democracy thing is a bust, I wonder if George II would be willing to take us back."
The two major parties warped what was just a bad candidate into a reason to regress the voting system because it allowed non-two party candidates to win easily (they still can win because 802 is serious about quality over party - hence the republican governor, and socialist senator/former mayor of BTV)
The system worked exactly as intended, the people who usually hold power felt threatened by it, and engaged their political machinery to restore that power.