Yes, final release means that there will be no more official releases of Kohana, nor will there be an official release of v3.4. The remaining core development team of myself, @zombor, and @zeelot3k have all agreed that Kohana has fallen far behind modern frameworks. We feel that it is better to turn Kohana over the the community and let the future of Kohana be determined by the people that still use it, just as we once determined the future of the framework we used.
I never tried Kohana but I remember a few short years ago it had a lot of traction and seemed like it was going to be a great framework for those looking to move from CodeIgniter.
Edit: I inadvertently left off that they are moving modules and libraries to a new Ohanzee project.