Advisor suggesting a change in the PhD research direction resulting in less theoretically intensive thesis. I am worrying about the implications
I'd suggest, pretty strongly, that you go with your advisor's guidance and turn the original project into a longer term goal. Your research career needn't end with the doctorate and it would be good to finish with some work done on a difficult future project. 

But the short term goal should be to get out the door with good letters of recommendation and enough of a push to get you into academia. What you can do after that is up to you and the possibilities you can bring to bear on your research. 

For what it's worth. I have a friend who is a reputed computer scientist. Top education, works in top level industrial gigs. But he also writes poetry. In fact, for more than ten years he has written a poem every day, without fail. The deadline for the poem is strict. But he described his methodology to me as something like, starting out with high standards and expectations for the day and continually lowering them until he has something acceptable. He gets the job done, and saves the rest for another day.