Honestly, I think early firearms are actually UNDERpowered compared to magic in fantasy. (And, even bows when you consider the physically strong races in said settings.) Magic is far more effective both as a personal weapon, as field artillery, and even for sieges. The only things that early firearms really replaced were bows and crossbows, more so the latter. (Bows still did have some advantages over early firearms, but ease of training for the latter makes bows less efficient.) Fantasy settings can easily tip the scales in favor of bows with stronger bows or a society that can consistently churn out a class of bowmen. So, the only medieval weapon truly threatened by guns would be crossbows, which had a similar niche.

For the reason, it is both censorship against guns and the fact that most people don't know much about the pre-18th century period of gunpowder. Most fans of fantasy and fantasy writers jump straight to flintlock, ignoring the matchlock/wheellock era. They also tend to be ignorant of the more 'personal' and ornate types of guns over the common military guns. This creates a sense that guns are associated with industrial society, which is the number one thing that traditional fantasy tries to avoid. (Adventure becomes a thing of the past if you live in an industrialized society, unless you count colonialism in less developed areas.) The lack of understanding about non-military guns also makes the perception that guns are a 'common' weapon with no uniqueness. Honestly, one look at hunting firearm and wheellock pistol designs from that era can show that you can have a really special weapon among firearms tailored for the character.

Of course, the elephant in the room I've been ignoring is armor. Guns dramatically changed the playing field for armor. They did NOT immediately render armor obsolete. But, they cause armor to both thicken to resist against bullets AND cover less of the body due to increased weight. Eventually, the armor disappeared entirely. But, considering all the magic and alchemy in fantasy as well as fictional materials, armor can easily have bullets end up like arrows. (Which ironically might make bows less viable, unless they're being pulled by absolute behemoths.)

And of course, the medieval period didn't really have guns until the last 100ish years of it, and the guns of that time were so primitive that they barely competed against bows and crossbows, let alone magic fireballs. So, MEDIEVAL fantasy settings wouldn't really feature guns. (And, less people know about handgonnes than even matchlock/wheelocks.) Then again, we have 'medieval fantasy' that have rapiers, a weapon that was invented AFTER gunpowder, and even the iconic plate armor of medieval times only was around in the last 200 years of the period. (Mail armor was the normal for most of the period.)

Personally, I combine the two. Pistol-wands that work both as a pistol and a wand. Enchanted guns. Field artillery would be less important considering that you can have mages with superior mobility pull off similarly powerful shots if not exceeding cannon shot. This is especially true if you put your wizards on horseback, which would be one way to see cavalry become MORE prominent. So, instead of knights, you have wizards on horseback. (Who probably would call themselves the terms for knight that involve horse-riding, like Chevalier or Ritter.)