Further, the vast majority of plastic bags have not been replaced by paper bags, but by people's own bags. For example in supermarkets there's an 80% decrease in use of plastic bags since pricing them in the Netherlands (Dutch but google translate works fine): https://nos.nl/artikel/2325519-tachtig-procent-minder-plasti...
Besides, if plastic is being replaced by paper, it simply shows incentives work. If paper is also undesirable, the next step is not to reintroduce free plastic bags, but to introduce pricing for paper bags just the same.
Honestly I don't see how this argument pops up in every single discussion on plastic bag reduction every time...