This means you can't pass the game around to your friends or sell it afterwards, which completely ruins the purpose of physical media imo. I mostly play PC these days so this doesn't affect me, but it's a disappointing direction for console games. At least they could've used an empty disc that has proof of ownership.
Nowadays even with the disc you still need to either copy the game to your console's SSD and/or download the latest patch from online service, as the optical disc reader is not fast enough. But at least the physical disc is still a (roaming) key to allow you to play the game (instead of the digital key that's tied to your account).
Also obligatory https://youtu.be/kWSIFh8ICaA