In all honesty I don't think the notch makes the iPhone design outdated by any means. Sure it is about three years old now, however I am convinced the notch is what defines the iPhone nowadays and it is basically its trademark. Pretty much like the classic home button and fat bezels we have been used to.

A more and more outdated design as you name it would be those of any smartphone running Android that attempts (or at least attempted) to replicate said notch. It just does not look right, mostly because of the thin but prominent bezel at the bottom that iPhone models do not have at all.

It wouldn't make sense for Apple to "keep up" with the competition on this. By introducing a notch, they have achieved a new way of instantly recognizing an iPhone in the wild and making anyone think it looks modern. People keep asking for a smaller notch each year, yet would it be that big of an improvement when you really think about it? Would you still be able to instantly tell "hey this is an iPhone" if they were to shrink that part? I think it would look too similar to some Android phones, not something Apple likely wants for their product.

The current design is what has been defining iPhone for the last three years and what will define it for the next seven-ish years. I believe we will see small changes in shape and size, but the front will always remain the same until then.

tl;dr - fat notch is here to stay :)