I still think it's fine.
My big issue would be players being lured away from their home nations at 18 - 20 but I haven't really seen that happen. The three year system was terrible and exploitable but no one is going to take the risk to bring a player in for five years just to qualify them after, it's just happenstance.
I see it as similar to someone moving countries to work as a lawyer, gaining citizenship and becoming a judge. Not common but it happens.
Tom Jordan is the only one I can think of who has moved as an adult (21) and qualified under the 5 year rule playing internationally right now and he was signed into the super 6 so probably not an SRU project, just a kid who took a chance, presumably out of college and made it work. Considering the rule change became effective in 2018, that's 2 and half years worth of evidence that the current rules aren't very exploitable.
20s excluding you from residency based moves would be a good amendment, maybe only fair to include parent / grandparents in that case too.
Like it was all a bit egregious before but now I think it's not worth changing too much. Rugby is too small to make countries less competitive and when the 12 or so competitive nations are split between countries with populations of over 25m or under 8m, it could become an even more of a closed shop.
Just looking at the lay of the land in rugby, without residency or ancestral rules, I think you'd quickly see Wales, Scotland, Japan and Italy drop off quite dramatically. Ireland less so now fortunately, we have the structures to stay top 6 or so on our own with peaks and troughs in there. So you're essentially looking at 7 countries who can sustain themselves and then a massive gap to the rest.