Dismemberment and lost limbs is fairly rare among the civilian population. This is not the case with the military - it makes perfect sense they would be the ones funding this, as they are regularly sending home guys with fewer limbs than they went out with.

I think they should be funding this - they owe it to their disabled veterans.

The military needs to improve the quality of life of its own disabled veterans

Probably so they can extend the service life of their own soldiers.

DARPA has always engaged in long-range seemingly "blue sky" research. They've pioneered autonomously driven vehicles and they invented the internet. To some degree they recognize that pushing the envelope will result in related breakthroughs that are imminently practical.

Militarily the primary goal is likely improving the lives of soldiers who have been maimed and dismembered in battle. This is even more of a concern today because the improvements in battlefield medicine have resulted in more and more soldiers surviving with wounds that previously would have been fatal, leading to more veterans with very serious disabilities.

Certainly there is a potential to weaponize this technology but you have to keep in mind the reasons why that's not such a big concern at least in the near-term. First, this requires pretty invasive brain surgery. Second, it has a fairly low success rate at the moment. Third, the amount of control available is significantly diminished compared to functional nerves and muscles. Overall there aren't any good reasons why you would want to try to switch to using a system like this for controlling a tank or a fighter jet, so it's questionable what sort of battlefield potential the technology has now. When we get to the point where these systems can match flesh and blood then that will change, but that's a much larger can of worms than merely military applications.