Yes indeed Karate Combat is very legit. I am not saying that all point karate ex shotokan are legit, though. Many of them are also shit, obviously.
The problem with shotokan is its emphasis on unrealistic movements and kata that are far too removed from real combat movements (the whole retracting the fists to the hip thing, all the blocks which look like a caticature of what an actual block may look like, the weird stances, etc.) and yes the focus on limited contact grooms bad habits like punching single punches with no power and off balance. I see this all the time shotokan footage from the top level. Oh also, a clear tendency to have one's torso pulled backwards. I just don't know why anyone still thinks all this stuff is a good idea in 2021 and why anyone would chose that over boxing /KB.
The line I draw between point karate and shotokan is that I think there are styles out there that train for points BUT with proper fundamentals. It's karate but no bullshit karate. Like american karate / which is not that far away from shiny pants or savate. Not the best style for full contact in a ring but still legit.
Shotokan is a relic from the 70's or whatever. The people that are successful with it in full contact situations are successful not because of it but despite it, and invariably cross train.