If there were a data breach where a hacker could figure out the encryption algorithm, you don’t want users to reuse an older password because those older passwords could’ve already been cracked.
By the way, this is why you should also never use the same password for every site. If one of your passwords is leaked and linked to a similar username or email, everything is vulnerable. I’ve had this happen before (the Target breach). After that I started using SSO exclusively, with a random 16 char password manager if SSO isn’t an option (crossing my fingers that bitwarden doesn’t get hacked like LastPass)