Instead of registering your.name you would register first.last.name (nobody owned last.name). This was intended to allow more people to have personal domains with fewer conflicts.
Now, years later, they are undoing it and they're even breaking existing domains. ("existing third level domain names will be terminated") This kind of breaking change shouldn't be allowed.
I guess they assume that nobody with a personal domain cares enough to sue them over this.
I currently have firstnamelastname.name which I use. I’m thinking I need to switch after this.
Most critically, the intent was to offer email forwarding at lastname.name, so you could also get email at [email protected].
That was the starting point - we started as a webmail provider letting people share lastname.sometld domains
Without that, it's just another name.