OpenSSH has dropped libwrap support in OpenSSH 6.7p in 2014
(f2719b7c in github.com/openssh/openssh-portable) and we
maintain the patch ourselves since 2016 (a0ee8cc636cd).
Over the years, the libwrap support has deteriotated and probably
that was reason for removal upstream. Original idea of libwrap was
to drop illegitimate connection as soon as possible, but over the
years the code was pushed further down and down and ended in the
forked client connection handler.
The negative effects of late dropping is increasing attack surface
for hosts that are to be dropped anyway. Apart from hypothetical
future vulnerabilities in connection handling, today a malicious
host listed in /etc/hosts.allow still can trigger sshd to enter
connection throttling mode, which is enabled by default (see
MaxStartups in sshd_config(5)), effectively casting DoS attack.
Note that on OpenBSD this attack isn't possible, since they enable
MaxStartups together with UseBlacklist.
A only negative effect from early drop, that I can imagine, is that
now main listener parses file in /etc, and if our root filesystems
goes bad, it would get stuck. But unlikely you'd be able to login
in that case anyway.