Like so much of the early Bible God is taking a walk with someone. This time he is not delivering terrible news like banishment or a world killing flood. Instead he is telling a man that he and all his ancestors will have to chop off a bit of their penis to seal their covenant with God.
The covenant is an interesting one because it is one he has promised Abram before. He has told him his ancestors will be numerous and found many nations, but then Abram’s wife is barren and cannot bear him a child. This time God promises him that he will have a child by his wife and it is that child who his covenant is with. Also that Abram is now Abraham.
Abraham does ask about Ishmael and makes God promise to keep his word to Ishmael which God somewhat does by saying he will make him fruitful and he will be the father of 12 kings of 12 nations but that his covenant is with Isaac.
A lot of the early Bible is repetition. This is at least the third time that God has promised to make Abraham the father of many nations and that his descendants will be more than all the stars in the sky or grains of dust on the Earth. If the Bible is the word of God then I think God wants us to understand that all humanity is connected more than we realize.
Both Ishmael and Isaac are bless by God. Only Isaac has the covenant but Ishmael is still blessed and they are both the fathers of nations and of multitudes. I think in some ways the writers of the Bible are explaining our differences. Think of it as from these two promises the whole world will be populated. Some will be circumcised and some will not but we all share a common ancestor.
Go back far enough and all humanity must share a common ancestor. It might have been the first single cell organism that split way back at the Cambrian Explosion, but at some point in the very distant past all of what was to become humanity sprang from the same source. We are all connected. God may have made his covenant with Isaac, but both Isaac and Ishmael were blessed and they both were promised to have more descendants than could be counted.