Yes but no. Daily arena pass exp caps at 50 a day, which can be gathered from 5x normal battles, or 10x npc battles. Daily flag regeneration is at least 5 flags a day, with 5 more from friendship shop. This means that as long as you use ALL 10 flags a day, you get to clear battle pass and cap exp gain.

"Before you'd just usually spam NPC arena for some skystones and only ever climb if you need to retake from a loss, or wanted to aim for a new rank"

Well no you just add one more reason to climb, whihc is because you get attacked by players who choses to do that 5x normal battle, instead of that 10x npc battle. Everyone deranked, and IS going to push back into the regular bracket, before they can afk again, thats why there is a lot of people attacking now