This wlterm project is another terminal-related project by David Herrmann, the open-source developer that wrote KMSCON as a DRM-based terminal emulator, the FBLOG driver, and previously proposed Wayland virtual terminals.
The wlmterm code-base is quite similar to kmscon but rather than targeting the DRM drivers directly, it's interfacing with Wayland. In fact, the code-base is largely shared between the two and the code is being housed in the same code repository (although it's optional which one to target).
As far as why this Native Wayland Terminal Emulator is being written, it's to serve as another independent client for stressing the Wayland API, it uses David's TSM terminal emulator state machine, it provides a proper and maintained emulator for Weston, and David simply wanted more insight on the Wayland protocol internals.
David plans to maintain wlterm going forward but he's not sure how long based upon when other tool-kits end up supporting Wayland well and then the native terminal emulators provided by them.
More information on the just-announced wlterm project can be found from this mailing list message.