WordPress 5.8 added the ability to add Blocks to sidebars. Blocks do not use the title and markup defined for a sidebar. They just use the normal HTML they would use in the editor. “Legacy” widgets can still be added, and should still have the option to enter a title and use the markup defined for that widget area.
WordPress is moving towards using blocks for everything, so some of this behaviour will change. The “new” way to handle this use case might be to create a wrapper Block that has a title field and an area for adding blocks. Or you could just use heading blocks.
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