This is not so much a historical question as a linguistical one.

In Chinese, "Wushu" is an umbrella term that has two halves to it. Taolu and Sanda; Taolu is the set routine, performance half to Wushu that you probably see in the Olympics. Sanda is the sparring, combative half that is very different from Taolu. In English, the term Wushu has grown to largely refer to "Taolu" while Sanda in English refers to a certain sport that is very popular in China.

The confusion then arises from "Wushu" referring to multiple levels of definition in Chinese, whereas in English "Wushu" pretty strictly refers to the performance half of the term. It would be more accurate to describe that as "Taolu".

Speaking to Traditional Kung Fu, the differing amounts of CMAs and their histories are so varied that it is impossible to generalize. We can see certain trends, though, such as modern Sanda incorporating many movements and techniques from Shaolin Longfist (the takedowns and ultimate goal of breaking your opponent's base is very Changquan like) and adopting the Song-dynasty era tradition of fighting on a leitai, a raised platform. Some CMAs have taken it upon themselves to build Sanda teams to compete on a more modern level, most famously the Chen-style Tai Chi school. And some others fall into disuse or disrepute, especially in the West where there simply aren't as many good CMA instructors to properly represent the style.

For most of Chinese history, most Chinese martial arts were very much combat-oriented. Most Chinese martial arts were weapons arts, and archery was for a long time a very important martial art. When the sword, spear, and bow became obsolete on the battlefield, then the relevant martial arts lost their main reason for being combat-oriented.

As for unarmed martial arts, one of the earliest detailed sources (Qi Jiquang, Jixiao Xinshu (New Treatise on Military Efficiency), a late Ming military manual) already condemns flowery impractical techniques, and notes that "The fist methods do not seem to concern themselves with the arts of great warfare; nevertheless, to move the hands and feet actively and to work habitually the limbs and body constitutes the gateway to beginning study and entering the art."

So while unarmed martial arts didn't become combat-irrelevant due to changing weapons on the battlefield, they never had much battlefield relevance. Many unarmed Chinese martial arts do have practical techniques for actual fighting, and modern Chinese martial arts schools produce some very good fighters in sanda/sanshou (Chinese kickboxing). However, many schools are content to just teach forms to students, with no sparring, so even if the techniques are practical, many students don't learn to apply them in any useful manner.

Specifically performance oriented martial arts are old, with sword dances already described in the early Han, and appear to have been popular during the Tang. Unarmed fighting also had performance aspects, with martial artists making money as street performers in the 19th century. Still, even in the late 19th century, a strong motivation for learning martial arts was combat (e.g., the Boxers, although not with much success considering the modern weapons used against them).

You ask "when/why did it change?" With the overthrow of the Qing, martial arts was well on the way to becoming a minor obsolete hobby. Reorienting Chinese martial arts towards fitness, making them part of modern physical education, was a major factor in keeping them so popular. See Brian Kennedy and Elizabeth Guo, Jingwu: The School That Transformed Kung Fu, 2010, for details of this transformation.

There were similar changes in martial arts in other countries. In Japan, swordsmanship survived, but predominantly as kendo rather than combat-oriented swordsmanship; see G. Cameron Hurst III, Armed Martial Arts of Japan: Swordsmanship and Archery, 1998, for details of the similar transformation of armed Japanese martial arts. Compare also the popularity of judo vs older styles of jujutsu, and karate styles like Shotokan vs the older Okinawan styles they evolved from. Where the modern martial art is a combat sport (e.g., judo and kendo), the modern art has some combat orientation. Their applicability and effectiveness in "real" fighting (whatever that might mean - the so-called "street" or combat sports with less restrictive rules) is often harshly criticised (e.g., karate where the main combat sport is point sparring).

For a broad survey of the history of Chinese martial arts, see Peter Lorge, Chinese Martial Arts: From Antiquity to the Twenty-First Century: https://books.google.com/books?hl=en&lr=&id=Nzjv0uPqUyMC

There are a few book out there regarding the evolution of chinese martial arts when i get a chance I will try to post the names of the readings.

The issue was that flowery stylized kung fu as been around as long as there was a chinese populace to thumb their noses at it.

Historically speaking soldiers, bandits, and performers were part of the lowest cast of chinese society. The process of turning fuctioning wrestling, boxing, and joint locks and turning these gross motor skills into dances came about as a way for out of work soldiers to make a living performing feats of acrobatic, strength( weight lifting), and milking naive students.

Not all of this happened in every dynasty. The earliest armies focused on weapons and older accounts of martial arts masters focused on their archery and weapons prowess. The country and folk martial arts tended to focus on various regional free style wrestling and boxing. Over time the military and regional fighting preferences bleed into each other as former soldiers returned to civilian life again.

Now the vast majority of chinese soldiers were illiterate peasant militia levies. So the concept of katas and group work outs acted as a unwritten way to train gross motor skills. This is why many chinese katas or forms make more sense if a weapon was in the performers hands(usuallly pole arms)

Now how does this affect what we see today?

Simple ultra confucian conservatism. Later chinese confucian philosophy was deeply anti athletics and military. Your average non manchu han chinese had negative opinions of these low people. So in order for out of work soldiers to get more students, they had to appeal to the wider chinese cultural idea of confucianism: so the introduction of non contact rote memorization of techniques and unquestioning hierarchy between students and teachers became a part of chinese martial arts.

This leads to generations of students learning things in an unrealistic unquestioning "traditional" manner.

One example of a master who DID NOT do this was tong zhong yi. This man was a former mercenary decended from the Manchu martial class of banner men warriors. Whose life style was a martial as it gets. The types of training they endured, according to primary sources, included the following:

To be strong enough to dead lift 200-500 lb stones

Draw a bow weighted at 120- 200lb draw. These heavy bows still exist and are roughly the same height of your average chinese soldier. (Source Jiang Nan imperial examination results 1882)

Tong zong opened a public school that primarily taught chinese /manchu wrestling, but his personal background, in addition to wrestling, were xinyiba kungfu, archery, and pole arms.

If you came to challenge him you could choose from the following:

Wrestling Pellet shooting(archery but with chinese hunting pellets) Pole shaking (common endurance and strength conditioning found in various kung fu styles derived from military practices see link https://youtu.be/y5l7iuHYaTA) Bow drawing ( you had to draw more reps than him)

His work laid the for how taiwan and china practice shuai jiao wrestling.

Sources:

The Method of Chinese Wrestling Book by Tong Zhongyi

The "reputation" for stylistic performances of Chinese martial arts is a long tradition dating back centuries. At least as far back as the Tang Dynasty, there were stylized renditions of various martial traditions performed at the imperial court and elsewhere, as evidenced by various surviving historical writings and poems (e.g.: Du Fu's Ballad on Watching a Pupil of Gongsun Danniang Dance the Sword Dance).

Many folk tales, later writings, and theatre portray martial arts performances, especially "sword dances", as commonplace even earlier. E.g.: the 14/15th-century novel Romance of the Three Kingdoms has many sword dances performed by the military commanders of the 2nd and 3rd centuries, while the 19th-century Peking Opera Farewell my Concubine and old folk tales of Liu Bang depict sword dances in the 3rd century BCE. These tales should not be taken as fact, of course, but it showcases how the acceptance of stylized martial arts performances not only existed in each of those times, but is also a popular enough notion that audiences would accept the idea of this being normal for millenia. As far as I know, there aren't any particular times when these sorts of martial arts performances became notably unpopular.

All that being said, you posed the question as Chinese martial arts being performance-oriented as opposed to combat-oriented, and this need not be the case. There are plenty of reknowned military warlords, generals, bandits, etc, famous for their martial prowess in duels or on the battlefield... and, in fact, many of those later retellings depict the same fiercesome battlefield warriors like Zhang Fei or Xiang Zhuang as being the ones to perform the sword dances themselves (usually because of some plot to assassinate someone at a party, mind you).

While there were certainly some artists who were specialized only in the performance version of martial arts, that does not necessarily indicate any diminishment of the importance of combat-oriented martial arts, or even that there was much of a divide between the aspects at all.