Because lithium batteries are basically chemical bombs.
The shutting down / slowing of a CPU isn't to protect the device, it's to protect the user from that chemical bomb. Have you ever seen a YouTube video of a lithium battery going critical? How would you like that to happen in your pocket?
Lithium battery current
MUST be restricted. So you can either restrict the current of an old degraded battery by shutting down the phone, or slowing down the CPU.
A slow phone provides a better user experience than a non-functional phone. Especially if you are calling roadside assistance at night.
Excellent discussion here:
https://www.imore.com/iphoneslow-what-analysts-and-experts-have-say . Note the discussion around the idea that the battery is communicating its condition to the power management system.