Likely to cut down on cost. Each 1.4 HDMI cable should be cheaper than a 2.1 HDMI. And once you factor the millions of units that will be shipped. Those savings add-up quite nicely. Bearing in mind that the S Series is reportedly going to be sold at a greater loss than the Series X. It is likely that Microsoft is trying to cut costs where possible.
For us consumers is sort of a annoyance. And most casual users will not even now that they need a better cable for HDR – fortunately the Series S’ port itself is HDMI 2.1. So I’m not a big fan of that move.