I won’t argue about whether this is dystopian, but the practical reason for the face projection is that they wanted to make this not just something you wear sitting alone in your basement, like most other VR headsets. They wanted it to be usable around other people, at a workplace, with family, etc.
Interacting with someone wearing a full face blind is just weird, so they thought that making the eyes visible would help make this a bit more socially usable.
I’m not sure that’s really going to work out — seems at least as awkward as Google’s failed Glass project — but Apple’s design decision has some merit.