It appears the patent is for "User-Worn Device for Noninvasively Measuring a Physiological Parameter of a User". So Apple is simply moving the logic to a non user-worn device - like a phone - to get around the problem. (this is my quick read / conjecture)
Yeah, prob because one cannot patent an algorithm itself, but only a specific implementation. The patent was about a wearable device so i guess the workaround was to do the computations in a non-wearable device.