Speaking as someone who typically goes for the water starter, I think it makes sense for several reasons.
The very first thing is that it's completely generic. A water seal is something that's not only been done before but it's been done before TWICE. Once people see it it's of course going to be compared to Seel and Spheal. Moreover, a circus seal is a really boring concept that's been overdone.
Taking all this into account, it doesn't help that it's overdesigned for a first stage starter. Everything about it screams "I'm a circus seal", and it's obnoxious. Take all three first stage water starters from before. At first glance you wouldn't tell Piplup, Oshawott and Froakie were supposed to be a prince, a samurai and a thief respectively, and you might not even be able to tell that at all. With Popplio one look at it and you'll go yep, that is a circus seal. Subtlety goes a long way especially when it comes to appreciating good designs, but Popplio is way too on the nose with what it wants to be. When you consider that on top of having that whole "been there, done that" vibe and being completely goofy looking, it makes sense.
Now I like Popplio. I didn't at first, but it's quickly growing on me but that's partly because it is dumb and goofy looking. I'm not gonna point at it and say "see that? that is a good design."