Some time has passed, but couldn't find any news about the change. a number of weeks ago, i was prompted to no longer us my iCloud password for my local user login.
Well from experience with folks having unknowingly changed their Microsoft password and being locked out of their Windows 8-10 systems, I could say such things are a lot more pain to work out how to unlock than it is worth to have the benefit of remotely resetting the password..
I don't know why they removed the option.
What I do know is some time ago there was an issue that prevented you from signing in when using iCloud credentials leading to a lot of people being locked out of their computers.