They cut out the entire system because they hated how bad it was. They said they didnt want to have it in a game until they could do it well. Perhaps they will add it back in with Fallout 4, done better than previous games. :/
Which one, the locational damage system or the underwater combat system, because I think they said they removed both systems because they didn't like how they turned out in previous games, and do not want to bring either system back until they could do it well. Though I really don't like this no underwater combat stuff because of the slaughterfish, which are more annoying than ever because you've got to get to a shoreline in order fight them now, instead of just fighting them in the water where they are like in previous games. Also, slaughterfish will occasionally swim above the water now, too, though I don't know if this is really related to the no underwater combat thing, but it's certainly more likely to happen if you have to fight them on a shoreline.