I agree with you that simple vector search + context stuffing is dead as a method, but I think it's ridiculous to reserve the term "RAG" for just the earliest most basic implementation. The definition of Retrieval Augmented Generation is any method that tries to give the LLM relevant data dynamically as opposed to relying purely on it memorising training data, or giving it everything it could possibly need and relying on long context windows.

The RAG system you mentioned is just RAG done badly, but doing it properly doesn't require a fundamentally different technique.