The FE is retained. Fedex converted 11 of its latest 15 722F's (the ones purchased new from Boeing in 83/84). The outboard engines are JT8D-217C; the middle engine the JT8D-17. Valsan went out of business hence the remaining 4 aircraft were not converted. Valsan converted a few others before collapsing.
By the time the 'Super 27' was re-activated, several years had passed and replacement/hush kitting decisions had largely been made by 722 operators. Hush kitting became popular because the capital cost was much lower...The Valsan/Super 727 is an expensive mod and any airlines choosing it would have to plan to operate their 722's several more years in order to achieve a reaonably payback.....likely only cargo operators would want to commit to retaining their 722 fleets for a long period.
Fedex ending up developing (with PW) one of the primary 721/722 hush kit platforms.....the rest of the Fedex fleet was thus hush kitted.
I dumped at the gybe mark in strong winds when I looked up at a Porter Q400 on finals. Can't stop spotting.