I would like to add that this change has harmed users. Users who either have to choose to show an annoying blue indicator permanently in the Dynamic Island / status bar, or experience worse battery life. This change should be rolled back, for the sake of users. It's a lose lose for them, regardless of which of the two options developers choose.

In the menu bar, tap Editor, then at the bottom there's Vim Mode.

I'm seeing dw work correctly here on beta 5. Maybe worth an Xcode restart?