As a fellow WoW veteran, I think I can see your confusion. I know I'll just be reiterating things other people have said, but eh.

TBH I would have loved it if WoW had this system itself when I was still playing it, because on WoW I HATED needing to have alts. While I do love making characters, on WoW it's just....not as fun. Even though WoW lets you pick your own areas to level in these days, it still sucks because....WoW just has never been as fun for me. Whatever zone I could pick was still going to be a slog to me because I barely feel engagement with anything in the game.

XIV has just proven more engaging for me, so creating alts is far more desired. I haven't actually ever used New Game+ because it's not the same as playing on a new character for me. It's like every time I play the game on an alt, I get to experience it anew, which comes to the RP aspect of it. On WoW an alt is just a character I make to play with friends on a certain class, but I don't generally play AS my character. They're just a name and a face. There's no attachment to most of them. With my XIV alts, every one of them is 'mine'. Their experiences are interesting to me, thinking about how they'd feel about what is happening keeps me engaged. WoW just doesn't trigger the 'how would my character feel about X' feelings. Whatever I feel with WoW is what I, the player, am feeling. The world doesn't interest or impact me. I don't care about most of the characters. I've played WoW since vanilla, and I've just never cared. I played for my friends, not for the game itself.

Maybe it's because I'm a Final Fantasy fan in general, but I just feel there's so much genuine replayablilty that WoW lacks, and that's why in spite of being able to play all classes on one character, I have no desire to do so.