This is a big deal. It doesn’t appear that everyone has this change yet, but it appears to be an actual thing.
The location targeting drop-down is going away. Only target people “living and or recently in” this location will be used going forward.
There isn’t an official statement from Meta on this yet. But all indications are that the other options have been removed intentionally.
While most advertisers would have used the default option anyway, there are very good reasons to use “People Living In” or “People Traveling In” this location. It will be interesting to see how those situations are impacted.