I find myself rooting for the old guy, although three isn't old. For a senior roo to abdicate to the younger roo while still in his prime, leads me to speculate he has a health issue making him not quite competitive enough to convince the younger roo that he's the boss and put the young upstart in his place.
The two have likely talked it out and there is an agreement between them that the younger roo will be dominant. While this would be simple enough to accept, it's troubling the older roo is being bullied to the outskirts of flock activity. This could indicate the older roo (this is where using names of the chickens avoids so many extra words) is not really quite on board with this. From this point on I will refer to the older roo as A and the younger as B, just for my own sanity.
I have two roosters currently, Strawberry the father and Toots the son. Strawberry took over all of the upbringing and training of Toots. They're now in the neighborhood of age six and four. Strawberry has periodically over the years reinforced his dominance over the Toots, and this is still their agreed upon relationship. It's the norm for the older roo to be dominant, and if my old guy was suddenly to switch roles with his son, I'd be concerned he was sick or injured and do a complete body exam.
This is what I suggest you do with A. Give him a good exam, head to toe looking for anything out of place. If you discover he's normal, then he may be suffering from bullying and he needs rehabilitation to get his self confidence back.
https://www.backyardchickens.com/articles/chicken-bully-chicken-victim-a-two-sided-issue.73923/ This may or may not be the best idea, though, because if A gets his self confidence back, he may go beat up B to also get his dominant role back.
Think it through. It's peaceful with things the way they are, but A may be depressed over the matter. Is it worth it for A to feel better about himself and risk conflict or would it maybe be better to let matters alone for the sake of peace? Your decision.