You misunderstand how the "document replacement" in y-prosemirror works. It's like arguing that React is bad because it performs a complete document replacement on every change. The diffing part makes it fast.
That said, it's not without problems - I acknowledge that. But it's not as bad as you make it sound. You didn't list one concrete case when you had issues with it.
I'm very happy that Nick and I finally found funding to make a rewrite happen. It really did take 6 years to make this happen, because it's hard to find funding for open source projects.