It's bold of Peloton to assume that their cult is willing to go along with removing features from another cult.
I love my Peloton but don't have an Apple watch so I don't have a dog in this fight, but I have friends who do who really look to their Apple watch for HR/general fitness monitoring, and if the idea is to get people to adopt to the Peloton watch/wearable, well, that's gonna be a real tough battle to win.
I have Apple watch. Apart from fitness monitoring, Apple watch is tightly integrated in the ecosystem - I can answer my phone on it, check my notifications, ping the missing phone, I have 1Password app on it for various PINs, it unlocks my Mac and I can double-click on the button on it instead of typing my password, I can allow my kid's requests for additional screen time on it, allow two factor authentication requests, tell my podcast app what should do with incoming episodes... Everything above I'm doing on daily basis. Leaving all of that just for a fancy indoor bike looks like a tough sell. But I don't have Peloton, so maybe I'm wrong.
I also have an Apple Watch. I looked at Peloton's offerings back when we were in the market for a treadmill. Would have bought one, too, except that giant-ass screen is good for one thing: watching Peloton classes. No Netflix, no nothing on that screen but Peloton. And people complain about Apple's lock-in? So we bought something else that works with Zwift and a host of other offerings.
Horizon Fitness' finest treadmill[0], paired with a 27" monitor and Apple TV in the garage. Except I don't have the monitor in front of the treadmill just yet. Without shuffling stuff around, the monitor is used for the rowing machine that we already had (NordicTrack) and Apple Fitness+ classes. On the treadmill we just use our iPads for now until I figure out what to do with the whole arrangement.
The treadmill works seamlessly with Zwift, which shocked the hell out of me considering that Bluetooth is involved. Fire up the 'mill, fire up Zwift, and Zwift asks if you want to connect. I'm more of a "I'd rather run in the rain than inside" person, but I've used it often enough to say that the Zwift/treadmill connection is solid and works reliably. I have not attempted to connect the treadmill to anything else. I have used it for Fitness+ workouts, and just use the spinny wheel controls to control speed and incline. My wife uses it work walking/running workouts with iFit doing the same. I don't think we're missing much by not having software control the effort. On a treadmill, I don't even know that would be safe (I'm curious if, for example, Peloton's treadmill does that).
As for the treadmill itself, I avoid treadmills when I can so I'm no expert. But after about nine months, I'd recommend it. I used to be fast, now I doubt I'd crack a 3:00 marathon due to age. With that as a baseline, the deck is long enough for my 6'/1.8m frame, and it's fast enough (12mph/~20kph) for intervals. Speaking of intervals, it has two easy-to-reach buttons (on those stalks, if you're looking at a picture of it) that can be preset for speed/incline. One button "recovery", one for "interval effort", and intervals are less fiddly. Presets are per-user, too, so my wife can have her own setup.
I love my Peloton but don't have an Apple watch so I don't have a dog in this fight, but I have friends who do who really look to their Apple watch for HR/general fitness monitoring, and if the idea is to get people to adopt to the Peloton watch/wearable, well, that's gonna be a real tough battle to win.