This isn't really surprising. Until we get some kind of advanced GAI that has flawless object recognition, there just aren't really any consumer use cases for AR beyond a couple games and momentary gimmicks. That's why Microsoft completely pivoted HoloLens to be a business tool despite initially promising all kinds of consumer applications, and Apple presumably came to the same conclusion and realized there's no customer experience in AR worth offering right now.
A lot of the leaks stated that a big part of why the watch existed is because Jony wanted to make one.
So was the big part of the glasses because Jony wanted to design glasses? (I can see the appeal of wanting to design glasses that are functional and fashionable, quite a challenge).
Regardless of if and when they are released, there is no way in hell that Apple has ditched on-face augmented reality. Inevitably the platform's goal is to get as close as possible to the user's raw attention stream (what the eyes are up to)...
