Why is it important to steep tea rather than simmer or boil it?

Some teas are usually simmered, but this is rarely done. The brewing process changes the proportions of the extracted compounds, and different times and temperatures produce different results. The proportions are also process inputs (the mineral content of the water plays a role), but time and temperature are the main factors, and the proportions help adjust the final strength (brew strength).

Based on all of this, the compounds extracted and the optimal ratio for brewing a tea varies by type and rarely involves steeping over a gentle fire to extract most of the substances in the leaves. The two main branches or types of brewing methods provide two different results which work best for different teas. Many black or green teas are brewed "Western style," with one teaspoon of tea leaves per cup of water, for about four minutes. Using boiling point water is common, or as each person understands and prefers around 90 degrees Celsius may be better.

Kung Fu brewing is the other main method of brewing, but there are more than two. It involves using relatively high ratios (eg. 5-8 grams per 100 to 150 milliliters of water, brewing multiple short infusions (e.g.: 10 seconds, most commonly boiling point water, but methods and preferences vary. For me, this method works better for most oolongs and sheng puerhs, and I use this method for some black teas. White teas and shu puerh are more resilient; for those, it depends on preference.

Some white teas are sometimes boiled over a gentle fire, especially shou cha, or compressed, usually aged versions. This practice is not typical, but it's not unheard of. Some types of black tea are also, according to some traditional methods. These are typically compressed teas, though not all versions are. Tibetan ghee tea is brewed this way, and as I understand it, brick tea often comes from Hunan.

Masala milk tea is a typical Indian spiced black tea mixture made with milk and sugar. It's difficult to make any kind of drinkable slow-cooked CTC Assam tea without adding milk and sugar (the black tea typically used in these teas) because it extracts a lot of tannins or compounds that cause astringency. Not a true shoumei (the type of white tea I mentioned), but a related version of compressed white tea, a variant of moonshine white

This is shoumei (a type of white tea), where the compressed leaves are separated from the cake using a brewer (gaiwan).

Hunan Fu Brick Tea, a type of black tea, is traditionally brewed like any other tea by simmering over a gentle fire

Concocting Masala Tea. Considering the steam and the lack of a stationary frame of reference, it's hard for the camera to focus.

Not exactly masala chai, but a similar Christmas-themed blend using similar ingredients. For masala chai, the tea and spices are most typically simmered with milk, but the ingredients and preparation may vary.

A piece of compressed sahong, a Yunnan black tea. It may seem odd to anyone to make tea over a gentle flame, at least to me, but the result may be reasonable.