The thing that make the french government angry is not much the cancellation of the contract, but how it was done it completely in secret behind his back.
You just don't do that to ally on the geopolitical stage.
I do think it could have been handled in a more diplomatic fashion, but there was never going to be a nice way to break the news. Further I think if the Naval Group had been anywhere close to delivering on time and on budget then it would have been a fundamentally different discussion. France would have been at the table and part of the deal.
I think the big problem for France now is how to protect the reputation of the Naval Group. If this is seen as a failure to deliver by the Naval Group then future export opportunities may be threatened. So instead France is aiming to portray as a grand betrayal by Australia and the US.
It is somewhat a betrayal. Secret negotiation is a way for US and Australia of telling to France (after 30 years of collaboration in Pacific) "We don't want to work on strategic stuff with France anymore".
I think the contract was important for France for soft power in the around the Pacific ocean as well. It's probably a very big loss to them in that regard, and I can't see how they can ever make up for that again. They're permanently hamstrung basically.
I think the big problem for France now is how to protect the reputation of the Naval Group. If this is seen as a failure to deliver by the Naval Group then future export opportunities may be threatened. So instead France is aiming to portray as a grand betrayal by Australia and the US.