That is not true. ufotable never planned to release it to the public and said it was a derivative work from the beginning. Moreover if they had planned to sell it at some point, they would have contacted ZUN about its sale. However, until the trailer was released ZUN didn't even know it existed (as he posted on Twitter), so it's reasonable to assume they never intended to release it for profit in the first place. They had the free screenings as part of the campaign, and they had the bonus materials DVD release. That's it. It's a bit unclear as to why Animate never bothered with an actual release, but it didn't have anything to do with Touhou, as they never released the other parts of their campaign outside of the campaign, either.
The premise of the story is basically this:
Anime Tenchou (Anizawa Meito) is hurrying to an Animate event hall to deliver a finished anime OVA. In his rush he leaps through a boundary that Ran had just finished repairing. It becomes unstable and a pocket world mixed between Gensokyo and the outside world is created that sucks in Anime Tenchou and a bunch of Gensokyo inhabitants. Flandre is one of them, and she starts blowing stuff up. Reimu is there to try and stop her and they have a danmaku fight. Anime Tenchou has to safely get back and reach the event hall without the film getting destroyed. He doesn't really do anything the whole time, though.
There are many other characters shown, more notably Marisa, Yukari and Ran; Remilia, Sakuya, Patchouli and Meiling watch from a rooftop; Satori reads a book inside a bookstore with Koishi running around nearby; Rumia, Mystia and Wriggle chat in an abandoned building; Suika, Yuugi, Nitori and ZUN are in a bar; besides that there's Nazrin, Byakuren, Murasa, and basically just a bunch more extra characters. Flandre and Yukari are the only ones voiced.
