Speaking about how paladins currently work in 5e, I don't think dropping deity selection is really all that big a deal. I think that focusing the class on its oath, the specific cause the character is devoted to is a good way to simplify the character while still giving it plenty of flavor, because I genuinely think that wotc is assuming people are still going to pick deities for their paladins, because why wouldn't you? It just means that the flavor of the paladin isn't directly dependant on the god themselves, which isn't a bad thing in my books. To use Pathfinder 2e as an example, I think that system is great, and paladins (the actual class is called the Champion, of which paladins are actually a subclass) are more directly tied to their deities in that system and I think it works, but it did have one particular issue to it. which is that each subclass was tied to a an alignment: paladins are lawful good, Redeemers, paladins who are all about forgiveness and redeeming even the wicked are neutral good, and liberators are chaotic good and all about freeing those in bondage (there are evil champions for evil alignments but I don't need to go into them right now). Well, that system works overall but it could get into strange territory at times. THe most notable and easiest to explain being the issue with Champions of Pharasma, the goddess of the dead. SHh's a classic neutral arbiter of the dead type god, all about fairly, imppartially judging souls and sending them to their proper plane. Makes sense that most of her champions would be Paladins, right? devoted to the idea of fairness and order and all that jazz while slaying the undead, etc. But because Pharasma is a neutral deity she can only have Redeemer paladins, which don't fit her flavor-wise. I see 5e's approach as more being aimed at preventing that situation rather than being aimed at making godless paladins the default status quo.
Regarding the BG3 imnplementation specifically, I think that the issue is that with the way oathbrkeaing works, creating a questline for it is just unfeasible. Because they decided that you could accidentally break your oath, they couldn't have the solution be a narrative one. As someone else said, this is a mechanical solution to what they percieved asd a mechanical problem. Larian simply did not view oathbreaking as a major, character-defining moment, and their implementation of this reflects that. Which I agree is the inferior approach.
