They definitely created this mode partially to have a "battlepass" system for WoW that rotates through seasons and themes (if this takes off and is continued). It isn't free because it requires a $15 sub, but there is no "premium" track for the pass as a result. I think they just realized that a battlepass didn't really work with WoW itself so they explored a battle royale standalone mode that would work well with it.
Maybe they will make the gamemode free, and the battle pass partially premium? They can definitely change how it works in the future.
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I like to think that NPC was a troll created solely to tease an upcoming battle royale.

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