You seem to be forgetting the biggest thing: Internally SwSh, BDSP, and Legends are all coded internally in Home as separate generations (listed as gens 8, 9, and 10, respectively), all three groups of games being "Gen VIII" is merely a fan thing, and ever since the BDSP/Legends update to Home's coding structure has been modified heavily so that the unique ID number assigned to each Pokemonn deposited into home now keeps track of more stuff than it initially did when the app was first released.
The generation thing is more or less a fan thing, but that's irrelevant to the actual point I'm making which is that pokemon data for SWSH/BDSP/LA is all intercompatible in a way that, say, Let's Go isn't.
And--Actually you know what I had other things to say but after thinking about it more let's just delete that and cut to a clearer chase:
At the highest (....lowest...?) most level none of this matters because the Pokemon data when it moves gen to gen is likely at its core just Game A (whether is an actual game or something like Bank or Home) telling Game B, hey this is what this Pokemon has, make a new Pokemon that matches it in the new structure, then deletes it from Game A
Purely hypothetically, any of these things could probably* just send back to an ealier Gen it's just more feasible with Bank & Home since the onus on remembering the "old" Pokemon is on the server (or the dedicated storage software, I suppose) rather than the cart's save data.
But all that's happening now, as of the BDSPLA update, is it keeps a list of its moves between games. It's an expansion on functionality it's already doing, and likely was pretty adhoc to it.
(& them tracking more data is irrelevant since they'd be needing to track more data for Gen 9 anyway, personally)
So putting aside any hair splitting about data structures at this point I think I actually fall on: at the end of the day it probably really came down to they just don't want generational trade backs. They could expand it outward and just keep a full copy of every Pokemon's full data and thus allow gens 8, 9, and onward (and also Let's Go) to freely swap...But I just don't think they want to? To an extent it probably comes down to "why bother?".
*Well technical limitations aside. I imagine the gen 4 titles had no problems reading and deleting from the GBA slot but might have had issues writing to it, as an example.
e: I just remembered we're entertaining this idea when they couldn't even bother to fix Spinda...