According to Apple, the iPad will still be able to be used as a home hub, but with a caveat - it will not support new architecture that is being built.
The new architecture that Apple is planning to introduce could be referred to as Matter, a new smart home standard that will allow for better interoperability between smart home devices. Matter support is expected to be introduced by Apple.
iOS 16 and iPadOS 16 will continue to support iPad as a home hub with no loss in functionality. Alongside these releases, the Home app will introduce a new architecture for an even more efficient and reliable experience. Because iPad will not be supported as a home hub with the new architecture, users who rely on iPad for that purpose do not need to update the Home architecture and can continue enjoying all existing features.
If you use an iPad for your smart home setup, you'll need to avoid updating to the new architecture, which will be available as an upgrade in the Home app's settings. If you want to continue using an iPad, you will need to avoid the upcoming update, which sounds like it will be in the next software release.
Apple has made it clear that the iPad won't work with Matter, as the preview page states that Matter accessories rely on an Apple TV 4K or HomePod as a home hub, without mentioning the iPad. For the time being, the iPad can be used as a home hub, but it's likely to change later this year with the release of future updates.
The new architecture that Apple is working on will allow the Apple TV, Apple TV HD, and HomePod to be home hubs.