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When you search for monsters from VGtM, you see that all monsters are marked as "Legacy". The relevant dndbeyond page doesn't say much about it:

we may revisit older content in order to improve or otherwise adjust them. Going forward, any content that does not reflect the latest rules and lore will be referred to as Legacy Content.

Monsters from VGtM have their counterparts in Mordenkainen Presents: Monsters of the Multiverse. For example, here's Bodak, and this is "legacy" Bodak from VGtM.

The Wikipedia page says:

The digital edition on D&D Beyond is scheduled to be delisted on May 17, 2022, which corresponds with the digital release of Mordenkainen Presents: Monsters of the Multiverse (2022). Monsters of the Multiverse contains revised versions of the player races and monsters originally published in Volo's Guide to Monsters and Mordenkainen's Tome of Foes (2018).

Apparently, Volo's Guide is Legacy Content now.

But what was wrong with monsters from VGtM, exactly? Don't they "reflect the latest rules"? How significant the changes were? What problems do I face, if I use these "legacy" monsters in my own adventures? I haven't purchased Monsters of the Multiverse yet, so I can't check this myself.

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It is obsolete by decree, as detailed in this Q&A. But your question is, what was wrong with the Volo's content, so that it was discontinued?

Fundamentally, there is nothing really wrong with it. It still is OK content and you can use it for your game. In many cases you‘ll not experience much difference. However there are a few reasons for the change

  • They did rework and unify the player races. For example, the old Kobold race had Pack Tactics which can cause gameplay issues. Now to get away from stereotyping, all races can freely pick their ability score increases. There are a few other changes in the treatment of PC races, for example some got reassigned from humanoid to fey, languages beyond common are setting and culture dependent etc. You can find WotC's explanation of these changes here.

  • In the same vein, they weakened alignment strictures. Races and monsters are now less prescriptive about how good or evil they are. For example, the Bodak changed from "Chaotic Evil" to "Typically Chaotic Evil" (thanks to @Jack) again to get away from stereotyping.

  • They simplified monster/NPC spellcasting, from a full spell list to a few at-will or a few times/once per day spells, to make them easier to DM. As you only get 3 rounds in a typical combat encounters, the reasoning goes, you many times would anyways only use three or so spells. For combat, offensive spell capabilities can get listed under actions or bonus actions, instead. (I personally like the old approach better).

  • Lastly, I think we'd be amiss ignoring that deprecating the older book is in WotC's interest because it means they can sell you the mostly same content all over again.

I don't think you have to worry about balance issues here. Most of the original MM monsters were never revised and are still playable. If there is any trend, it has been towards making the PCs even more powerful relative to monsters, and IMO, they already were plenty strong after tier 1, and most of the monsters here are for higher level play. For your private game, you can safely ignore MotM. It only is an issue for official play like in AL, which mandates the official, latest version.

In addition, the older books (Mordenkainen's Tome of Foes, Volo's Guide to Monsters) contain a lot of lore about the monsters they present and their societies, information that is missing from MP:MotM, and that may still be useful to you when role-playing these monsters.

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    \$\begingroup\$ @enkryptor I don't think you have to worry about balance issues here. Most of the original MM monsters were never revised and are still playable. If there is any trend, it has been towards making the PCs even more powerful relative to monsters, and IMO, they already were plenty strong after tier 1, and most of the monsters here are for higher level play. For your private game, you can safely ignore MotM. It only is an issue for official play like in AL, which mandates the official, latest version. \$\endgroup\$ Mar 17 at 20:39
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    \$\begingroup\$ @NobodytheHobgoblin could you please add this to the answer? I mean, the essense of the question is — what does this "legacy-ness" mean for DMs. \$\endgroup\$
    – enkryptor
    Mar 17 at 21:03
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    \$\begingroup\$ I think it’s relevant that this is mostly a digital way of dealing with a physical book problem. They let Volo’s Guide and the original Mordenkaiden’s Guide go out of print, and replaced them with a single book which has updated stat blocks for most of the races and monsters in both, but much less supporting material. Likely because DM books always sell fewer copies. The “Legacy” tag is only required on DDB because they continue to support that content for anyone who bought the earlier books, which are no longer on sale, and needed a way to differentiate the versions for anyone who owns both. \$\endgroup\$ Mar 18 at 13:17
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    \$\begingroup\$ @Jack - thanks - I can see how Undead creatures devoid of personality or souls,[...] cruel and relentless hunters, either of their own volition or at the behest of some greater power [...] being only typically chaotic evil. #sarcasm The devs will dilute the game so much it will one day every game entity will be an amalgam of numbers with some interchangeable hologram on top. After all, Earth needed 3 books to go from harmless to mostly harmless \$\endgroup\$ Mar 18 at 14:09
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    \$\begingroup\$ The point @GuybrushMcKenzie makes about "much less supporting material" might be really important. Losing supporting material in VGtM is a significant loss to DMs. \$\endgroup\$
    – Jack
    Mar 18 at 14:31

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