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This is what happens in general because losing a title fight drops you one place in the rankings. It should drop you like 5 places for the division to keep moving.
That creates those patterns you spoke about where a guy loses a TS and then loses his next 2 fights and still top 5 and all the guys in the top fight fight each other for 3 years.
Inactivity should also be punished. Just look at Gaethje. After Khabib beat him, he sat out what? Over a year? Then he fought Chandler, got choked out again by Charles and now, almost 2.5 years later we still have him clogging up the top 5. He's even ranked #3 (!!!!)