>I've seen tutorials showing that way, but then I've also seen some say that the new NEC updates for 2018(?) made it a requirement to use 12-3 and include a capped neutral... for whatever reason.

This is inaccurate. The NEC requirement is 404.2(C), and applies only to switches controlling lights. Even if it did apply to more than lights, you are not obligated to upgrade your switch wiring to the new code.

And even if it applied to non-lighting and you were obligated to update it, there are seven listed exceptions, and three of them would probably apply: #2, you have access to the wiring without removing finishing materials; #4, the switch serves only a specific appliance rather than the entire room; #7, receptacle loads. (If the switch controls a receptacle rather than a light, it does not require a neutral.)

The purpose of the NEC requirement is that "smart switches" need a neutral return to provide power for their circuitry.

The way they had it set up is not ideal from a maintenance and repair perspective (you have to pull the dishwasher to repair the disposal), but is perfectly fine from a wiring perspective.