That example of practical effects looked quite stiff and fake like you said. But practical effects also continued to improve over the years even though CGI came to dominate the film industry.

Alien was released in 1979, but a few years later saw the release of An American Werewolf in London (1981) which featured a memorable werewolf transformation (all practictal effects). Then in 1982 saw the release of The Thing which took practical effects a notch higher.

Also, today filmmakers sometimes use a hybrid approach: combining practical and digital effects.

I do wonder how much further practical effects would have developed if CGI haven't overtook the film industry.