Sugar is basically the recreational drug of children. It's normalized, but it's known to be addictive and harmful if consumed in excess (which it frequently is).

Society is now starting to recognize the addictive and harmful potential of digital/smartphone overconsumption in children. To name a digital children's product "sugar" evokes (to me) digital addiction, the attention economy, and how children need to get off their phones.

I don't read too much into names, but the branding does feel a bit obtuse at this cultural moment.