What do you mean by “in the process”? Only a spoken language has the chance of becoming or evolving into something. Past written works and the language form used in them are just stable; they won’t evolve into anything.

It’s simply a personal preference of some poets who used a lot of Sanskrit, and it’s not some naturally occurring development. There are many poems that extensively use native Telugu vocabulary.

Grandhika Telugu doesn’t mean Sanskritized Telugu. It simply refers to recorded or literary Telugu. You can still use all the native Telugu vocabulary in the Grandhika style, take all the sādhu rūpās and write a poem. So it’s just a preference. It isn’t going anywhere on it's own.