This means you can't pass the game around to your friends or sell it afterwards, which completely ruins the purpose of physical media imo. I mostly play PC these days so this doesn't affect me, but it's a disappointing direction for console games. At least they could've used an empty disc that has proof of ownership.
This isn't the first game to do this, usually "physical edition" means you just get a box. What's inside depends on the publisher. Usually digital-only cases have a giant warning on it that there is no CD inside.