Bitccode is actually just the LLVM intermediate language. When you compile source code using the LLVM toolchain, source code is translated into an intermediate language, named Bitcode. This Bitcode is then analyzed, optimized and finally translated to CPU instructions for the desired target CPU.
The advantage of doing it that way is that all LLVM based frontends (like clang) only need to translate source code to Bitcode, from there on it works the same regardless the source language as the LLVM toolchain doesn't care if the Bitcode was generated from C, C++, Obj-C, Rust, Swift or any other source language; once there is Bitcode, the rest of the workflow is always the same.
One benefit of Bitcode is that you can later on generate instructions for another CPU without having to re-compile the original source code. E.g. I may compile a C code to Bitcode and have LLVM generate a running binary for x86 CPUs in the end. If I save the Bitcode, however, I can later on tell LLVM to also create a running binary for an ARM CPU from that Bitcode, without having to compile anything and without access to the original C code. And the generated ARM code will be as good as if I had compiled to ARM from the very start.
Without the Bitcode, I would have to convert x86 code to ARM code and such a translation produces way worse code as the original intent of the code is often lost in the final compilation step to CPU code, which also involves CPU specific optimizations that make no sense for other CPUs, whereas Bitcode retains the original intent pretty well and only performs optimization that all CPUs will benefit from.
Having the Bitcode of all apps allowed Apple to re-compile that Bitcode for a specific CPU, either to make an App compatible with a different kind of CPU or an entirely different architecture or just to benefit from better optimizations of newer compiler versions. E.g. if Apple had tomorrow shiped an iPhone that uses a RISC-V instead of an ARM CPU, all apps with Bitcode could have been re-compiled to RISC-V and would natively support that new CPU architecture despite the author of the app having never even heard of RISC-V.
I think that was the idea why Apple wanted all Apps in Bitcode format. But that approach had issues to begin with. One issue is that Bitcode is not a frozen format, LLVM updates it with every release and they do not guarantee full backward compatibility. Bitcode has never been intended to be a stable representation for permanent storage or archival. Another problem is that you cannot use assembly code as no Bitcode is emitted for assembly code. Also you cannot use pre-built third party libraries that come without Bitcode.
And last but not least: AFAIK Apple has never used any of the Bitcode advantages so far. Despite requiring all apps to contain Bitcode in the past, the apps also had to contain pre-build fat binaries for all supported CPUs and Apple would always only just ship that pre-build code. E.g. for iPhones you used to once have a 32 Bit ARMv7 and a 64 Bit ARM64 version, as well as the Bitcode and during app thinning, Apple would remove either the 32 Bit or the 64 Bit version, as well as the Bitcode, and then ship whats left over. Fine, but they could have done so also if no Bitcode was there. Bitcode is not required to thin out architectures of a fat binary!
Bitcode would be required to re-build for a different architecture but Apple has never done that. No 32 Bit app magically became 64 bit by Apple re-compiling the Bitcode. And no 64 bit only app was magically available for 32 bit systems as Apple re-compiled the Bitcode on demand. As a developer, I can assure you, the iOS App Store always delivered exactly the binary code that you have built and signed yourself and never any code that Apple has themselves created from the Bitcode, so nothing was server side optimized. Even when Apple switched from Intel to M1, no macOS app magically got converted to native ARM, despite that would have been possible for all x86 apps in the app store for that Apple had the Bitcode. Instead Apple still shipped the x86 version and let it run in Rosetta 2.
So imposing various disadvantages onto developers by forcing all code to be available as Bitcode and then not using any of the advantages Bitcode would give you kinda makes the whole thing pointless. And now that all platforms migrated to ARM64 and in a couple of years there won't even be fat binaries anymore (once x86 support for Mac has been dropped), what's the point of continuing with that stuff? I guess Apple took the chance to bury that idea once and for all. Even if they one day add RISC-V to their platforms, developers can still ship fat binaries containing ARM64 and RISC-V code at the same time. This concept works well enough, is way simpler, and has no downsides other than "bigger binaries" and that's something server side app thinning can fix, as during download only the code for the current platform needs to be included.