It's never been a great argument. Even non-atomic Linux distros have you reboot after updates. It's just the safest way to ensure that everything is running with the updated packages. You're kind of in an untested state if you have mixed versions of applications and their dependencies running.

Plus, updates aren't the only thing that require reboots. Various config changes will need a reboot or at least require you to log out and back in. Even just adding your user to a group needs you to end your session for the change to apply.