I'm still totally devoted to my work on Sex Sim as well as FLSM. In fact, I've been working on the new updates and should have a new character out very soon. Another update I'm working on is dresses\skirts. Things are in the works! It just takes some time to make happen due to working with the slightly older code base of Sex Sim. New stuff is indeed coming, though.
As far as an engine update, or threesomes, or things like that, we'll all have to wait and see. A migration to the newer style engine would be awesome, of course, but it's not a trivial thing. It would basically mean a total re-write of the entire game.
I assume with a newer version that people would want all of their old characters, etc. to work, which would take even more effort to balance it all out. If people wanted a
totally new version of Sex Sim, however, like a version 2, where old items wouldn't work but the whole thing would be new and improved, I can see that happening sooner than doing a new version while making sure all of the old items are still totally compatible.
Anyway, yes I am busy with FLSM but rest assured that I am still happily working on updates to Sex Sim as well.