It wasn't. Play services is just add on features that proxy app permissions and centralize push notifications -- no actual Android features moved into Play services that I know of. Ie: auto filling SMS OTP codes. It
feels like Android is being sucked up that way, but that's because there are a lot of really nice features in there, like push notifications, geofencing, etc.
You can still run Android without GMS core and Play services -- I do that, myself, on a Pixel 3a running Graphene. The trick is that you lose some nice functionality (which Android actually makes up for in some cases, ie: SMS OTP copy buttons), and the mapping experience is god-awful (mostly because the OSS mapping scene is hopelessly stuck in the 1990s GPS model)