Apples implementation of Always on Display is the continuation of there expanding display tech. Like many features in tech products, if the hardware exist on the device it doesn't mean you have to use it for its intended purpose exclusively. The idea that Apple would put Always on Display on an iPhone should be exciting, here's why...
ProMotion was intended to deliver a very smoother user experience with 120hz refresh rate while also being able to reduce it for lower energy consumption with 10hz. Integrated system wide, automatically scaling to apps frame rates and 120hz modes being accessible to developers.
Meanwhile Apple was focusing on energy efficiency with the Apple Watch. Knowing how many times it inadvertently wakes up all day, the AW got display and display driver tech intended for maximize on energy efficiency with no compromises. Its just as bright and colors just as nice but its 15% more power efficient at 60hz by itself but its also capable of reducing its refresh rate to 1 hertz further reducing energy consumption. Now considering the AW7 has 50% more screen area, much faster SoC, blood oxygen sensor, electrical heart rate sensor, haptics in the crown, always on display and altimeter, compass, U1 chip, fast charging, etc, etc with a SMALLER battery than my AW3 and it gets the same battery life....I'd say they are on the right track. Plus I left out the standard evolutionary upgrades, wifi 5ghz, BT 5.0, better GPS, 50% louder speaker, accelerometer that can be used for fall detection, etc etc...
Point is, the 'always on display' on the Apple Watch wasn't the feature the technology that powers it was designed for. The technology just lends itself to allowing an 'always on display' feature run without negatively effecting the battery life beyond previous models that didn't support the feature.
The reason we should be excited about an 'always on display' on the iPhone isn't because of the 'always on feature' but because of the technology used to implement it. Use the feature or turn it off, it doesn't really matter because the decrease to 15-25%+ decrease in energy consumption from one of the largest energy consuming things on the phone (screen) is what we should be excited about.
That is just speculation though, and matter of fact if I were to speculate further I would look to watch battery sizes decreasing as hardware efficiency offsets the time between charging like the Apple Watch. 16wH battery in a smartphone like the iPhone 13 PM is just treating the symptoms.