Chess theory is "always getting better". This is because chess has the property that the skill curve is so extreme and the game so deep that it is seemingly always possible to continue to improve and find new ideas.
Chess engines play a fundamental role in modern human chess. There is a causal relationship between the state of the art in chess engines and the play styles of the top pro's. This is because better engines can find new idea's in positions previously thought to be completely explored. It happened recently with an alphazero game in a spectacular way iirc
There is a theorem which says that given any chess engine, it's impossible to decide if that chess engine is playing in an optimal way. So when you say "in terms of the likelihood of being the best-performing entity at that game", I think its important to be very precise about what we mean, even though in spirit I agree with that statement =)
I started working on a project to build a chess engine that is specifically designed to beat other chess engines by playing in a non-optimal way specifically tailored to find and exploit bugs in the opposing chess engine code/flaws in its algorithm.
I also once proved that any chess engine based on the principles of stockfish will necessarily contain positions where it can be exploited into making bad moves. If you fixed the algorithm to make it not exploitable in that specific position, the theorem says there would exist another position where it would be exploitable. This is what I call the theory of "exploitative chess engines" (in the sense of maximizing the possible gain), as opposed to ones which attempt to play in an "optimal" way (minimizing the maximum loss)