"Ethics no longer apply modifiers to Pops, and instead only apply empire modifiers"
I did not like that. So what is ethics for in the populations? Except for making them unhappy, of course.
https://forum.paradoxplaza.com/forum/index.php?threads/stellaris-dev-diary-54-ethics-rework.987286/
This details the ethics and factions rework if that helps clarify.
In short, ethics determine what factions a pop will join and factions function as interest groups with political agendas. Happy factions provide bonus influence and make their member pops much happier too. The degree to which pops will shift ethics - and which ethics they shift to - is determined by many factors and not just the lame ethics divergence modifier. Optimizing pop placement by ethics would be annoying as loyalties shift due to changes in the empire's political situation.