Earlier quoted context omitted.
This exact function is duplicated by long pressing on the space bar. This has been there since iOS 11, I believe. So you don't actually need 3D Touch to have the benefit of the awesome cursor UX.
Drag space bar is new in 12, but two finger drag on iPad has been around a bit longer. It’s a bonus for SE users without force touch. Seems obvious to include this, but I assume the reason they went back and bothered with it is the new XR taking force touch back out.
Since iOS 9. Early in the betas this feature existed for non-3D Touch iPhones as well, but then it was removed and restricted to models with 3D Touch.