As someone who wants to see Wireguard succeed and in even wider use, this move makes sense from that perspective too. The more implementations we have available, the more we can trust that the protocol is secure and stable enough. Personally I also have about 100x more trust in Mullvad than Cloudflare both in terms of security but more importantly privacy, but that's just the cherry on top.

Issues in the protocol itself would need all implementations to change, but issues in the implementation would obviously be isolated to one implementation. For something like Wireguard, I'd wager a guess that issues in the implementations are more common than issues in the protocol, at least at this stage.

WireGuard is a protocol that, like all protocols, makes necessary trade-offs. This page summarizes known limitations due to these trade-offs.

Deep Packet Inspection

WireGuard does not focus on obfuscation. Obfuscation, rather, should happen at a layer above WireGuard, with WireGuard focused on providing solid crypto with a simple implementation. It is quite possible to plug in various forms of obfuscation, however.

tl;dr Read the docs.