The key point is that when revolutionary France unilaterally absorbed sovereign principalities (and exclaves located within the borders of late-XVIIIth century France), Monaco was not "along the French coastline", but within the Kingdom of Sardinia.

During the revolutionary wars (1793-1795), the national Convention unilaterally merged several sovereign territories that either were within the pre-1789 French territory or had fallen within the areas controlled by revolutionary armies (such as Monaco) in French departments. An example is the Principality of Salm-Salm, which was merged into the department of Vosges on March 2nd 1793, and was already a sovereign enclave within France before 1789 (with extensive agreements with France such as freedom of passage for French subjects, etc.).

The national Convention (and generally speaking, republican revolutionaries) favored French borders based on natural (i.e. geographical) boundaries (in French it is the doctrine des frontières naturelles de la France, which was still an important tenet of French historiography until recently, and was extensively mobilized to argue for Alsace-Lorraine reintegration into France between 1870-1918). As such, they from 1792 moved towards annexion of "transalpine" (i.e. French side of the Alps) parts of the Kingdom of Sardinia, and in particular the historic duchy of Savoie (which was French-speaking, and economically speaking had close connexions to the Dauphiné area), annexed on Nov. 27th 1792, and later the County of Nice^0 (of which Monaco was an enclave), annexed on Jan 31st 1793. Monaco was then integrated into the French republic on Feb. 14th 1793. Similarly, the "Comtat Venaissin" (i.e. Avignon and neighboring areas) which were part of the papal states, were integrated into France (and became the department of Vaucluse : the integration of Orange in this department leads to weird borders and exclaves, which follow the pre-revolutionary border : it is relatively rare in department borders to have this), or Mulhouse.

When the Congrès de Vienne^0b redesigned borders in Europe, it restored France to its 1789 borders, with some exceptions : France was allowed to keep Comtat Venaissin, Mulhouse, the areas around Montbéliard. Transalpine possessions of the Kingdom of Sardinia were reverted to Sardinian control, including the Nice area, with specific "perpetual neutrality" (Swiss like) arrangements for Savoie. The Monaco sovereign prince was restored (as the general spirit was to restore pre-revolutionary sovereigns, except in Germany where some rationalization was done), under the protection of Sardinia (via a specific treaty).

The county of Nice only became French in 1860 (as a result of the traité de Turin du 24 mars 1860, part of the agreements between the Second French Empire and Sardinia, in exchange for French support against Austria) : this raised the question of the legal status of Monaco. The political context had by then become quite different, and Monaco was relatively established as a sovereign entity, excluding annexion : this led to the traité du 2 février 1861 between France and Monaco^1. Since then, status quo has generally been preserved, save for tax matters which led to some trouble in the de Gaulle presidency. Aside from political and diplomatical aspects, in the immediate aftermath of the 1860 annexion of the county of Nice, Monaco also became much more closely associated with French financial interests, via the société des Bains de Mer (real estate developer and operator of the famous Monte Carlo casino), whose heiress incidentally married in 1880 a Bonaparte (Roland Bonaparte, son of Lucien^2).

​

---

^0 : Alain Ruggiero (sous la direction de), Nouvelle histoire de Nice, Toulouse, Privat, 2006

^0b : Guillaume de Bertier de Sauvigny, Metternich et la France après le Congrès de Vienne, Hachette 1968.

^1 Traité du 2 février 1861 entre la France et la principauté de Monaco, Jean-Pierre Maury, Digithèque de matériaux juridiques et politiques, Université de Perpignan, 2009

^2 Fun fact : their daughter Marie Bonaparte was a famous supporter of Sigmund Freud, whose escape to England she helped organize in 1938.