Looking at the Launch HN [1], I think the question should instead be "has YC lost it's way when its latest company is founded by 4 University of Waterloo students?". When phrased that way, the answer seems obvious, given that YC started out funding current college students in Boston.
Having gone through YC in W19 with Wanderlog (https://wanderlog.com), I think one of its best parts is how it invests in founders who are outside the typical VC hobnob. I remember meeting folks who'd worked in utilities in Texas all their lives, multiple groups of university students taking a leave, and other groups to whom VCs would simply say "you need more traction"
Like most early stage investors, they're not investing in an idea -- they're investing in founders! I do have to say that YC partners probably encouraged the founders to pivot (like we had been told), but the ultimate choice of what to pivot to is the founders'. So like another comment said, cut these 20-year old university students some slack!