Is the bridge actually being discontinued?
No, but what from their moves it is very clear it won't live long.
they don’t support SMTP, but realistically they actually can’t unless they have the ability to read your emai
Technically they do use SMTP... and it's possible for a provider and provide submission and generic SMTP do clients without having to read the email content.
There are lots of ways to do e2e encryption on e-mail (no server access to the contents) over SMTP (OpenPGP, S/MIME etc.). There are also header minimization options to prevent metadata leakage. And Proton decided NOT to use any of those proven solutions (in a standard and open way at least) and go for some obscure implementation instead because it fits their business better and makes development faster.