George:
Here in NJ, under the UCC and presently the 2017 NEC for new work.
The replacement of devices terminated on the EXISTING wiring does NOT require a permit. Therefore, this is a moot issue for NJ.
Now, take that EXISTING branch circuit with "old" NM and try to extend it, and then it becomes an issue, as a permit, and compliance with the NEC is required.
Yes, you are 100% correct regarding the undersized EGC based on the 'current' NEC, but I have to follow the above statement.
Stay safe & healthy.
