Google posted in the Google Ads Community Forums about upcoming changes coming to Display Campaigns. Google said these changes are for simplifying campaign creation and management. Also Optimized targeting is now set as the default targeting method when you create new Display campaigns.

Here is what Google posted:

Here is What’s New?

• To simplify campaign creation and management, Smart Display campaign features were made available within all Display campaigns.
• Optimized targeting (see the video) is now set as the default targeting method when you create new Display campaigns.

Upcoming changes (as of August 1, 2022):

• If you have an active, paused, or removed Smart Display campaign, we will migrate it to a Display campaign and keep your settings intact.
• Display campaigns will be the only Display campaign type. Your migrated Smart Display campaigns will become Display campaigns.
• What do you need to do? Nothing. Any Smart Display campaigns in your account will automatically migrate without any action needed on your end. The migration will not cause any fluctuations with your campaign’s performance.

Here are some FAQs they posted:

• Will the performance of my Smart Display campaign be affected by these updates? No. All of your campaign’s settings will stay the same, and there will be no impact to the campaign’s performance.
• What settings should I use to replicate Smart Display campaigns? To replicate Smart Display campaigns you can use the recommended defaults for a new campaign. This will include using the Smart Bidding strategy that works best for your needs, using optimized targeting, and using responsive display ads.
• What happens to my old Smart Display campaign? If you have an active, paused, or removed Smart Display campaign, we will migrate it to a Display campaign and keep your settings intact.

There are more details over here and over here.

Forum discussion at Google Ads Help.