I don’t think it’s bad, per se, but ChatGPT has effectively made it pointless to do certain kinds of assignments now.
A lot of professors have been teaching the same way for many years. It’s a reckoning.
Even assuming all the students do it in good faith, there are factors other than knowing the material that can affect their performance on coursework. For example one person may have access to a well equipped, ergonomic, quiet space and plenty of undisturbed time in which to complete the assignment, while another may not.
The major benefit of exams is that everybody is taking them in, as far as possible, consistent and controlled conditions. It's not ideal, but I think it's better than the alternatives.