Apple says dropping support for some Watches is about processing power.

“The great new features in watchOS, including the capabilities of Siri AI and the new tap gesture, work best with the processing power that is in Apple Watch Series 9 and later, Ultra 2 and later, and SE 3. Older devices can still be paired with iPhones that are running the latest software and continue to receive security updates, so they can continue to have a great Apple Watch experience.”