Brother, you asked why people don’t do it. So I just brought up one of the reasons that I’ve observed. At one time, people used to do it because they believed it was sunnah. Recently the awareness that it’s not has been increasing. This was further proven when I saw that the majority of people didn’t do the 3 hug greeting after being told that it was neither sunnah nor mustahab.
The imam was not at fault at all for clarifying the position of the act to the congregation, who were clearly confused about the matter. The imam didn’t tell anyone not to do it, however he clarified the fact that it doesn’t hold the position people believed it did.