AP1 had it because it was something MobileEye developed and optimized over a great number of years. MobileEye produces some incredibly efficient, and capable stuff. It's why Intel paid billions to acquire them.
The way to think of Tesla solution is they tend to be a bit more brute force. It's not as power efficient as other solutions, but they better control their destiny having a mostly custom solution.
There likely wasn't enough processing power within the HW2 computer left over to do it. We could probably have sign recognition, but not 360 degree vision detection at the same time.
It's a pretty major limitation in my opinion, and one of the reasons that EAP owners might be really frustrated once HW3 computers have sign reading capabilities.
Personally I hope they use the sign reading capabilities of HW3 to improve their maps so the maps themselves have the proper speed limits, and so forth. This would mean EAP cars benefited even if they didn't have sign reading capabilities themselves.
The FSD will of course need sign reading for things like stop signs, etc. So maybe that's why they're keeping sign recognition for it, and not AP2. I can't find where I read that though so I easily be mistaken on that detail.
I don't believe L3 with the A8 is live yet in Germany, but it's expected this year. Although lots of people won't consider it to be truly L3 due to the really slow speed limitation of it.
Here is about all I know about it, and why it's not being released in the states.
Why the 2019 Audi A8 won't get Level 3 Traffic Jam Pilot in the US
When thinking about L2, and L3 I wouldn't focus so much on capabilities but on liability. Even if EAP was REALLY, REALLY good and could handle a situation just like an L3 car it's still not L3 until the car itself takes responsibility for the driving where it allows you to read a book.All you have to do is take over when prompted, but it's supposed to give you adequate time to take over.