It's not a Thunderbolt issue. It's about supporting "DisplayPort Alternate Mode." This particular monitor doesn't support Thunderbolt.
Re:2016 Retina MacBook Pro Caveats
by wlesieutre on Tuesday November 22, 2016 @03:01PM
(#13017124)
Oh interesting, I didn't think monitors could run video over the USB cable and still offer a USB hub on the same connection, but it looks like the DisplayPort data goes over the additional USB-3 lines and preserves the original USB-2 connection for accessories. Good to know.
Thunderbolt displays can do hubs at full speed, the 5K LG Ultrafine has 3x USB 3.1 gen 1, which IIRC means up to 5 Gbps (vs 480 Mbps for USB 2).
Not sure why your comment was marked [dead] but I just vouched it so it should be back.
https://www.wired.com/2011/06/thunderbolt-cable-teardown-rev...
Thunderbolt 2 had the same compatibility issue in that it was the same connector as Mini DisplayPort but couldn't run over a standard DP cable. That was pretty minor since it's not like everyone has a pile of loose DP cables sitting around.
On the other hand, your average consumer never uses a Thunderbolt device to begin with on account of them being significantly more expensive than other accessories. They'll likely never run into this even with it using a USB-like cable, and the people who do need TB will figure it out.