My guess is that Apple thought the previous design was too complicated, with people not understanding the watch could have a local library that it played from directly, as well as access the phone's library where it would cause playback to happen on the phone.
Looking at how they've redesigned it, it seems like they want the watch's music app to focus solely on facilitating/encouraging local watch playback, with the expectation that people will have the option enabled by default which causes the phone sync a certain amount of music to the watch (or playlist, or stuff from Apple Music, etc), providing an always-available selection of music that people can use on their watch when away from the phone, out jogging, etc.
Then control of the music on the phone becomes consistent with how control of other audio playback on the phone is done - essentially a "now playing" remote, or launching the associated installed app automatically to provide a custom version of that experience. This also is consistent with the fact that native watch apps can now no longer do background audio playback.
But for the rest of us who do understand how the app originally worked, it was a handy feature to have!
Maybe this is all part of a longer term scheme to get the watch ready for the music app being able to stream music directly from Apple Music over LTE or similar?
