To some degree it definitely does come down to Unturned 3’s optimization and methods of rendering, for sure. The castle likely wouldn’t have been that bad from the exterior, but the interior could have ended up being more intensive.
Larger models in general do end up being a fair bit laggier though, of course, especially the more complicated (intricate/detailed) models like the Oil Rig. Those types of models can be quite intensive on their own, similar to how laggy “compound objects” and landscape holes get. (The core framework for landscape in general seems to be part of the issue, to be honest.)
It very well could have just been a design choice though, as making a fun layout for the castle’s interior to match the exterior may have been too limiting at the time of Germany’s already shaky development (Neuschwanstein was planned & added far later into its development too). The interior being done separately could’ve been due to feedback, due to time constraints, or due to the limitations the exterior model presented on the layout.