This is just shutting down an already outdated API. Devs should be moving off of it, and now it has a year out set for full removal instead of just being deprecated.
Health connect doesn't set your step count goals, because what it does in the back end (because that's what it is, the back end API) is set a way to read and write that data.
The front end, Google Fit, also connects to health connect on the back end. And the Fit app is not given a shutdown here, just the API it also uses in the back end.
I suspect Google will stop developing Fit, as they kind of already have. However, all these varieties of other apps out there (Fitbit, Withings Health Mate, Samsung Health, MyFitnessPal, etc) can use health connect data, and do allow you to set goals. They use the same data, and now are more interoperable with Health Connect than they were with the Fit API.
Come on now, that's not just a Google problem and you know it, no need to shit on Google for something damn near every tech company does. Google does their fair share of shitty things, this isn't really one of them.
If it's not killed by google, it's replaced with a crappier version. Having developed against many Google APIs, "deprecation" is a very frequent word they use. Most of the time there is no stated reason why an API had to be deprecated, just that it is being deprecated. They also give minimal time to switch over, the worst one I had was PubSub's API having a mandated migration we had to perform - in under 3 weeks. Very difficult for an already tasked team of engineers who had a mountain of other more pressing work. Why I actively push against working on GCP, or google products at all. I've successfully pushed 2 companies away from using Google cloud now.
Microsoft, as an example of the opposite, will have years long deprecation strategies, and usually go overboard with making sure engineers have a good replacement, and documentation on how to migrate. They have a lot to be hated for, but damn are they good with managing downstream engineers.
AWS also rarely turns off services that customers are using going so far as to support customers using outdated services for years. Of the major cloud providers only Google does this.