The Indian Ocean site apparently provides a safer landing target for the planned deorbit burn test. According to a SpaceX commentator during the IFT-3 webcast,
We are intentionally flying this new steeper trajectory so that we can test things like engine relight without substantially changing where we expect to splash down.
This added to what had been previous posted on the SpaceX website for IFT-3:
It (Starship) will also fly a new trajectory, with Starship targeted to splashdown in the Indian Ocean. This new flight path enables us to attempt new techniques like in-space engine burns while maximizing public safety.
So far all Starship integrated (booster and ship) flight tests have had a planned second stage cut-off that is just short of orbital velocity. This is so that the ship will safely reenter in a planned remote ocean area without the need for a deorbit burn. For the first two flight tests, which apparently did not have a planned engine relight test, the planned landing was to be in the Pacific Ocean near Hawaii. However as it turned out neither ship made it that far since both ships were destroyed by the flight termination system within minutes of launch.
For IFT-3 an engine restart test was planned, although it was cancelled due to excessive roll rates of the vehicle. The reason for the engine restart test on IFT-3 (and now IFT-4) is to simulate a deorbit burn, as stated by Elon Musk at an event at Starbase on January 12, 2024, where he stated the goals for IFT-3 (timestamp 52:20):
We want to get to orbit and we want to do an in-space engine burn from the header tank and prove that we can reliably deorbit.
However this type of test creates a situation with three main possible outcomes, a failure to restart the engine, a successful restart but not reaching full duration, or a successful restart with full burn duration. Any of these outcomes will change the location of the landing, so they want to fly a steeper trajectory to keep the exclusion zone as small as possible within all of the various outcomes. This is being achieved by flying the test on a steeper trajectory, with the result being a landing in the Indian Ocean instead of Hawaii.
Interestingly the burn would be in a posigrade direction, not retrograde as many people were assuming since it was being done to simulate a deorbit burn. However since the test objective is to test engine restart, not an actual deorbit, this method apparently fits better with the goal to safely land regardless of the test outcome.
It should be noted that even though the launch license indicates that SpaceX plans to do five tests that will land in the Indian Ocean, this does not mean that the next four tests will all be suborbital. Once they have successfully conducted an engine restart test, it is likely that the next test after that would be an orbital flight. However even with the orbital tests they apparently plan to continue doing water landings of the ship for now, even though Elon Musk has indicated that they may begin attempts to bring the booster back for a return to launch site landing as soon as IFT-5. In the case of orbital tests the distance from the launch site will not matter, and it is presumably simpler to have one launch license that will work for both the suborbital and initial orbital tests.