I honestly do not buy that whole "it will always be year 1" nonsense at all, not unless a single eorzean year is worth multiple of our own earth years. Just because a bunch of unimportant side NPCs dialogue never changes doesn't mean time isn't progressing. Logically time would have passed. I'm not sure how much time, iirc MSQ dialogue stops making timeline references at about the end of ARR / start of HW, but logically at least a year, likely more, would have passed.

The funny thing is, there is a perfectly valid lore explanation why old NPCs don't change their dialogue, much less positions, movements and actions. The Echo. It allows you to not only relive old memories, but also actively interact with them. This is why we can do dungeons and fight bosses whenever we want. There are even quests, like the Anima weapon, that refers to going back to do old content like Garuda again as "reliving the fight in your mind". So, when we go back and talk to old NPCs and doing old sidequests? We are experiencing and manipulating old memories via the Echo.