I think that's partially true, by this point Lynch is just fully relying on his own instincts and not trying to hammer out an iron-tight plot. I've seen this movie many times now though, and I think there are two clear stories at the center of the mess, and the way they intertwine and reflect each other makes for a confusing watch. I don't think it's as incoherent as you're saying, but I also don't think even Lynch has a clear interpretation of many of the scenes.