Some context. The United States canceled TEAM SPIRIT exercises -- which North Korea hated -- in 1994 for a similar reasons and replaced it with what we now call KEY RESOLVE/FOAL EAGLE.
nbcnews.com/news/military/…

The language about replacing the big exercise with "smaller, mission-specific training" today is very similar to the description of the new KEY RESOLVE/FOAL EAGLE then as "smaller" and "more realistic" than TEAM SPIRIT.

My point is that, as KEY RESOLVE/FOAL EAGLE came to resemble TEAM SPIRIT, the exercises began to draw the same ire from Pyongyang that TEAM SPIRIT did. And so what matters is less the name than the political situation and the content of the exercises.

There probably isn't much downside to the cancellation provided it was done in close consultation with Seoul. But another implication is that, over time, Pyongyang may well come to hate whatever comes next just as much as it hated TEAM SPIRIT and then KEY RESOLVE/FOAL EAGLE.