The only reason HS2 phase 1 is being finished between Old Oak Common and Birmingham is because it was too embarrassing to pull the plug given the amount already spent on it. I suspect that the Labour Party would have breathed a huge sigh of relief if it had been cancelled completely last October.
The NAO report criticised the fact that no one has really got any view about the rail service that can be run once Phase 1 is built other than Old Oak Common to Curzon Street. Even then, there will still likely be 2tph from Euston to Birmingham via Weedon to continue Coventry having a fast service to London, 2tph on the Chiltern line and 2tph via Northampton, with lots of people from the West Midlands complaining that their Euston service has been slowed down.
You've hit the nail on the head with the word "embarrassing", but this context goes back a lot further. HS2 was planned to benefit Heathrow from the outset, but then right back in 2009, the "Heathrow imperative" was downgraded. However, by then a great deal of planning had already gone into the Chiltern route (as necessitated by running close to Heathrow), and it was too embarrassing to change the route to the far more sensible M1 corridor.
Many of the consultants who undertook feasibility studies for the route choice, were working to a brief which had the Chiltern route already written as the route of choice, which meant they needed to find reasons why the M1 route was not cost effective. As part of this, the justification for running out through West London was put on to Crossrail, but Heathrow was the original reason, and it was the embarrassment of not wanting to be seen to have made the wrong route choice that compounded it all.
The M1 corridor would of course have removed all of this nonsense about whether or not to run into Euston. It's been a terrible couple of decades for rail development in the UK, and now Rachel Reeves appears to be putting the tin lid on HS2 running into Euston, having inherited Rishi Sunak's damaging rail stance and instead of repairing it, she seems to be damaging it yet further.