Kamala Kahn's Ms. Marvel replaces Tom Holland's youthful Avenger. Move over Spider-Man, Kamala Khan (Ms. Marvel, if you're mean) is the new MCU rookie.
Spider-Man remains in the MCU, but his function has changed. Marvel fans first met Spider-Man and Tom Holland in Captain America: Civil War. Peter Parker spent as much time admiring everyone's powers and outfits as fighting in Civil War's airport fight scene.
Peter Parker matured over three solo flicks and two more Avengers features. He was no longer star-struck by No Way Home, leaving a space in the MCU for Kamala Kahn to fill.
Spider-Man was also an audience surrogate. Peter Parker embodied moviegoers. He considers the Avengers' superhero identities "made-up names" because regular people do.