There's a few things which go into this (hi, I'm the instructor!).
One such reason is historical. Standard ML is a research language, and a significant amount of work on it was done by professors at Carnegie Mellon, who developed the curriculum for this course.
Even setting that aside though, I fully agree with the choice to teach it in SML. For transparency, I work professionally in OCaml, so I am not unfamiliar with it, and I enjoy it quite a bit. That being said, I think that the approach taken by CMU is best summarized as the fact that languages are ephemeral, and the concepts are what matters. We don't teach programming languages, we teach concepts -- so even if SML is not widely used, the tradeoff for having students have a simpler, less distracting, and better learning experience is well worth it.
OCaml has its own intricacies that make things difficult. For instance, you can go down a lot of rabbit holes with `dune` and `utop` and `ocamlc` and `ocamlopt` and all of these things, versus SML/NJ's simple interactive REPL. Another thing is that the language is just generally more "bloated" -- you can teach modules, but then what if a student starts running into first-class modules, recursive modules, or even beyond that, GADTs and classes and objects?
(as an aside, this is my primary reason for why I would not want to teach an introductory course in Haskell. To do anything, you suddenly need to understand the concept of type classes and lazy evaluation, and that's simply too much. I don't know much about the other languages.)
I think teaching is as much enabling students to succeed as it is to prevent them from shooting themselves in the foot. For an anecdote, there is an `Option.valOf` function (of type `'a option -> 'a`), which essentially is just a bad function that should be avoided where possible. Every semester, without fail, even though we never tell students that function exists, students are smart enough to use Google, and will use it anyways, ultimately harming themselves.
I think that same mentality applies to programming language choice, here. Keep it simple, keep it neat, and make sure that the students see what is necessary for their education, and not have to spend mental energy thinking about much more.