NU'EST wasn't doing well commercially and Pledis was prepared to drop them (likely in large part due to having Seventeen), that's why they came on the show. Here's a Soompi article I found that cites what they said on Episode 1 of S2: "The members stated that they knew that many considered them a failed boy band, and added, “We’re thinking of this as our last chance. We’re here because we’re that desperate.”"

They released an album after the show, the group disbanded in 2022, years after Wanna One disbanded.

Yeah, that was after Produce 101 S2 skyrocketed the members' popularity and motivated Pledis to continue giving them comebacks. Even right after the finale, the NU'EST members who didn't make the final lineup were worried that they lost their final chance, since back then it was unprecedented for a Produce show to skyrocket a group's popularity that much. Just look at their sales: they went from 30k in their last comeback before Produce (Seventeen had 300k that year in comparison) to 300k the comeback immediately after Produce. That doesn't negate the fact that they weren't selling well before Produce and that they had an uncertain future ahead when they signed up for Produce.