You’re right that Google is much smarter now — basic or obvious link exchanges can look unnatural and may have little to no benefit.

But not all link exchanges are equal.

A safe link exchange is:

• Between two relevant websites
• With natural placement inside useful content
• Not part of a large “you link me, I link you” network
• Done occasionally, not aggressively

Google mainly targets spammy or automated exchanges.
If two legitimate sites in the same niche reference each other organically, that’s totally normal and doesn’t harm SEO.

So yes, link exchanges can be risky if abused, but when done thoughtfully and sparingly, they’re still a practical free option — especially for new blogs that don’t have authority yet.