The whole SDCC panel is up on YouTube, and finally I could hear Bryan explain their reasoning for creating a new written language, instead of using Chinese Hanzi as they had before. And tbh I am satisfied with the explanation (you can check yourself, I've linked directly to the point where they talk about it).
Basically, Bryan explained:
the decision to make a new written language was made from discussions with their cultural consultants at Avatar Studio.
they loved using traditional Chinese and working with their calligraphers, but wanted to do something more now that they had more resources.
they decided it didn't really make sense to rely on written Chinese, considering all of the different cultures Avatar is pulling from.
Bryan "locked himself in his office for 3 months" to create this language.
Bryan didn't like how a lot of fantasy languages look like they're just "English/the Roman alphabet in cosplay".
that's why they specifically designed the Avatarian language with Hangul (Korean written language, which Bryan had previously studied) as the main inspiration.
it's called "Avatarian" and is a phonetic language creating "syllable blocks", similar to Hangul.
it uses simplified "four element" symbols as their base, based on established Avatar iconography.
I was suspecting that their reasoning for decentralizing Chinese was not "laziness" or a lack of budget, but rather to be more inclusive of the different cultures Avatar is pulling from. ATLA itself uses a variety of cultures as inspirations, but it really felt like the show centered itself on Chinese culture specifically, which if you consider, there's a bunch of valid reasons to step away from.
I personally like that they used a mix of Hangul and Avatar's own iconography, especially given that the previously depicted written language was using Hanzi. Hangul itself is a written language created in a country that previously had only used Hanzi (well, Hanja) - in order to promote literacy and because it represented the Korean language more accurately. There's still ways you can imagine "Avatarian" existing alongside Hanzi, and possibly other written languages, within the world of Avatar.
Consider, for example, how the Fire Nation is primarily Chinese in inspirations, but also during ATLA, a colonizing power. You could easily imagine how they might have been promoting their own written language during the war, and after it ended, there was a movement for a more "inclusive" written language. Similarly, in modern Korea, they almost exclusively use Hangul, but Hanja still exists in the background, such as people have official Hanja spellings of their names and so on.
I understand people initially felt disappointed, as the use of authentic written Chinese was something the series had always been applauded for "doing right" (and I, too, was confused). However, I think the jump to assume it is merely done out of laziness or from a lack of sensitivity was a bit too fast. Frankly, if you consider it, centralizing Chinese culture and writing is actually not that respectful or inclusive to the other cultures Avatar takes inspiration from.
It also locks Avatar in this pretty poor spot of being an American fantasy cartoon series masquerading as a shoddy Chinese rip-off world, which muddles Chiense cultures with a truck-load of other cultures anyway. Like a Chinese rip-off fantasy world is not even truly what Avatar really is, and here's a discussion of why this aspect might not even be that compelling to Asian audiences. To put it shortly: Asian-made media and more specifically sourced Asian-inspired series can do a much better job of being "authentically Chinese/Asian" than Avatar will ever even hope to be. Avatar isn't likely to compete with the vast amount of Asian media depicting those cultures much more accurately, so it might overall do better of selling itself as more unique, mixed-cultural fantasy world, which isn't trying to overly rely on a shallow "Chinese aesthetic".
Furthermore, within ATLA/Avatar's own lore, it basically centralizes the two biggest nations in the Fire Nation and Earth Kingdom, which are the two "most Chinese" nations. It completely overlooks the - already tending to be treated as - lesser nations, primarily the Watertribes, which takes very little Chinese-based inspiration.
GIven the vast diversity of cultures Avatar takes inspiration from, and the variety of cultures within the world-building across more than 10.000 years, it is not difficult to conceptualize the people of Avatar could have used different ways of writing. So it is not that much of a problem to create a new fantasy language, which let's remember, is still ultimately Asian inspired.