Because the O2 sensor was a COVID-era feature that nobody cares about now and moves zero units. Soon Apple will have definitive confirmation in the form of Watch sales data.
I know a lot of people that got it for that specific feature. Not one of them got it for COVID or medical reasons.
There are huge communities of people that really like this feature. Notably, many people that do things at altitude.
I won't pretend that my narrow experience is a market maker, but I also won't generalize it to say something as broad as its a feature "nobody cares about now and moves zero units."
Try to think beyond your own experiences and worldview.
This is yet another case where it is easy to fall into the "product manager trap" -- that is: designing for "most people". The trap is to de-feature things where "most people" have only modest engagement, but a few (likely your most evangelical customers) care intensely about that feature. Don't fall into that trap. The goal is to create a feature collection of "the one thing" that each segment cares intensely about, not to create a basket of meh features that everyone finds meh.