According to Google, “In the next few weeks, you’ll see a notification in the classic Hangouts app to switch to another SMS app already on your phone for SMS, or to download Android Messages if one isn’t available. Choosing a new messaging app will not impact your SMS message history, and all your messages will be accessible in whichever new app you choose.”
With Google starting to make Hangouts more enterprise focused with Hangouts Meet and Hangouts Chat, there are some who are speculating that the removal of SMS is part of their plan to perhaps create their own version of Slack or Microsoft Teams where Hangouts will be used as a tool for communications in the work space.
Google has reassured users that the consumer version of Hangouts will not be going anywhere so for those who use it to chat with friends, it’s business as usual. However if you are looking for SMS integration, like Google said you can consider the Android Messages app as an alternative.