No, paleo dieters don't bundle all non-paleo foods. Almost all foods that can be bought in a store or farmers market has been altered in one way or another since the neolithic began. And most paleo dieters acknowledge this. The purpose is not to perfectly replicate the diet of a paleolithic human, in the fashion of a civil war reenactor, but to most closely mimic the profile of the diet humans evolved to eat.
Some factors in this are nutrient density, lower simple carbs, intermittent fasting, and ketosis. These have been shown in research to be beneficial. But of course, there is a lot of research that shows a diversity of results. The strongest evidence comes from studies of hunter-gatherers who mostly lack chronic diseases, and this forms a central basis of the paleo diet.
By the way, Americans ate more meat than bread prior to the 20th century. They also only ate a fraction of the sugar in the past. Yet many of the chronic diseases only became common in the 20th century. Heart disease was a rare disease in the early 20th century, but by the end of the century it was rampant.
@JenniferRM - "However, when researchers tried the same thing on other cultures to see if this was a human universal, it turned out that the other four (Extraversion, Conscientiousness, Agreeableness, and Neuroticism) were relatively universal but in some cultures (if I remember correctly it was things like agrarian peasant societies?) basically everyone is pretty low in Openness relative to measurement norms derived from Japan or the US or whatever."
I would note that the very framework of personality traits can be questioned as WEIRD bias. But personally, I'm fond of explanations of personality like trait theory. There is an attractive elegance to such models and the research is immense. On the other hand, defenses still can be made for trait theory, even for openness. One would predict that agrarian peasant societies, with above average rates of pathogens and parasites, would measure as below average specifically on openness. That precisely fits the point made in the above piece.