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.
EDIT: Bethesda has confirmed that only the PC version won't include a disc. Physical versions of Xbox will include a disc. Whew.
The reason they would never do this (unless the console maker and game publisher take a huge cut) is because buying a code vs buying a new digital game is the same thing. So why would someone buy a game directly from Xbox’s storefront, rather than buy a “used” code which ends up being the same thing to the user. Plus the codes would have to be sold on some sort of verified marketplace by Xbox, or whomever, or it would be a disaster of people getting scammed and bad PR. I just don’t see a world where it works.