I suspect that the reason that transitions are disabled if display is changed is because of what display actually does. It does not change anything that could conceivably be smoothly animated.
display: none; and visibility: hidden; are two entirely different things.
Both do have the effect of making the element invisible, but with visibility: hidden; it’s still rendered in the layout, but just not visibly so.
The hidden element still takes up space, and is still rendered inline or as a block or block-inline or table or whatever the display element tells it to render as, and takes up space accordingly.
Other elements do not automatically move to occupy that space. The hidden element just doesn’t render its actual pixels to the output.
display: none on the other hand actually prevents the element from rendering entirely.
It does not take up any layout space.
Other elements that would’ve occupied some or all of the space taken up by this element now adjust to occupy that space, as if the element simply did not exist at all.
display is not just another visual attribute.
It establishes the entire rendering mode of the element, such as whether it’s a block, inline, inline-block, table, table-row, table-cell, list-item, or whatever!
Each of those have very different layout ramifications, and there would be no reasonable way to animate or smoothly transition them (try to imagine a smooth transition from block to inline or vice-versa, for instance!).
This is why transitions are disabled if display changes (even if the change is to or from none — none isn’t merely invisibility, it’s its own element rendering mode that means no rendering at all!).