The option was removed as part of a general UX refresh that moved from a sort drop-down to pill buttons -- this general drop-down -> pill thing seeming to be a general trend on apps and websites now.
But it's hard to imagine why it was removed in the first place. Saving a minuscule amount money by reducing views of less-cached long-tail content doesn't seem important enough. Nor does there seem to be any compelling engagement reason to prioritize newer videos. And I'm not aware of an ad revenue reason, such as older videos being less monetizable.
Maybe it was just a misguided attempt at UX simplification that backfired?