Could you move the manifest file at libraries/fof/lib_fof.xml to the correct installed location at administrator/manifests/libraries/lib_fof.xml? Unless for some reason FOF expects the XML manifest to be here, otherwise the default installer code will have issues at update trying to update the manifest cache (in which case we'll need to adapt for that).

EDIT: Corrected destination file name after reading through the library install adapter. Another headache with inconsistencies in the install code...

@mbabker Thanks for the feedback. I moved the manifest to its proper place and added the update site in the SQL files.

May I know what was the initial reason for adding FoF into CMS?
Is it being used for any of the core components or was it something else?

It is used by the two factor authentication plugins and by the post-installation messages component.

There was a Joomla! Working Group on creating and integrating a Rapid Application Development feature. FOF was selected for that feature as it already had most features and it was faster to add the missing ones than start from scratch. It has also been extensively discussed on the mailing lists. Please refer to those resources and thank you for not reopening a discussion that's been over since several months ago.