That's annoying and bad but isn't ultimately a deal breaker I don't think. That seems like something that can be fixed later, either through a patch or, worst case scenario, a sequel game. Definitely not great, seems sloppy, but I was worried you were saying all transfs were cut off period and I guess I'm glad that's not the case.
It's not going to be fixed later with a patch or anything, they're making this
a new policy; they're not going to make games with every single Pokemon in it in the future because of time and balance issues that they never elaborate on and could probably be fixed with a delay or balance patching instead of just not programming a certain Pokemon outright. A Sword/Shield sequel isn't going to fix this either because it'll be following the new policy of only programming up to probably 450 Pokemon that fit the region aesthetic out of the current 800.
Another issue arises with the fact that once you transfer your mons up to Home, you can't transfer them back. So that Shinx in the example I mentioned before that can't go to Sword/Shield is gonna be stuck in Home for who knows how long until a game it is programmed in comes out for it to transfer to. All while you maintain the fee to keep it there.
For a series that focuses on catching them all and worked hard on features like Bank to allow you to transfer old mons up, this abrupt decision goes against the very fundamentals of the series itself.
This is different from the jump between gen 2 and 3; they had technical limitations at the time that didn't allow them to transfer data between each other, and that was eventually fixed for Bank and VC compatibility. Gen 3 also had all the mons in the data, some just weren't encounterable in the wild and needed to be caught and traded/transferred from another game that had them.
This is different from Sun/Moon having a specialized National Dex for Alola, because even though certain Pokemon aren't in the wild and have no dex entry ingame you could still transfer them over and use them because they had their battle data in it.
This is different from Let's Go, which is a Yellow remake (and has been called a side game in the beginning before changing to being called a mainline game.)
This is about a game not having a certain Pokemon existing in it at all because
it was never bothered to be programmed in.
*end rant*It might not matter to some people who don't have or never transfer mons, but it matters to people like me who do that have played for a long time and like to take their ribbon mons/shinies/childhood mons with them to new gens. It's a slap in the face tbh