The three-status default is a guess
It works for solo work and falls apart the moment anything needs review, waiting on someone else, or blocked. Teams then encode those states in the task title, which no report can read.
What changed
Statuses now live in the workspace. You name them, order them, pick which one means done, and every view, filter and automation follows. Renaming a status renames it everywhere, including in tasks that were created before the change.
Keeping reporting honest
Exactly one status is marked as the terminal one. That is what lets completion mean something across a workspace where one team has four statuses and another has seven, and it is why the setting cannot be left empty.
A word of restraint
You can make eleven statuses. You probably should not. Five is usually the point where a board stops being readable at a glance, and readable at a glance is the whole reason to have one.