What functional gameplay features are being removed and sold back? … [and how can that negatively affect the game?]
This is actually relatively easy to answer:
Ever since development of Halo 3, Halo developers realized that having a persistent game experience which extends beyond individual matches was a good idea. In order to achieve this, they implemented a progression and customization system which allowed players to rank up and achieve goals for themselves, and to show adornments for their achievements; to cultivate and develop their personal digital avatar which represented things like time with the game, personal aesthetic, and skill based achievments. This was expanded on by even making it your main player character in the campaign of Halo: Reach.
There are entire academic psychology papers written on the long-term motivational effects of player customization. This element isn’t divorced from the gameplay : it is part of the gameplay, and for a lot of players it’s what creates long-term investment in the larger franchise as a whole.
This isn’t an issue of “modern gamers”- this is an issue of a 14 year old legacy gameplay system in a 20 year old franchise being removed. It’s an issue of the people in charge of (and defending) the current overly aggressive monetization scheme not fully understanding or appreciating the dedicated fan base of the franchise, or all of the elements which have made it successful. This is bad for all players, and it is bad for the health and longevity of Halo Infinite itself.