Stipe was completely toasted when the fight with Jones was originally signed. It was pretty clear in his last two fights with Cormier, even though he won, that Stipe had no knees left and could no longer effectively wrestle or defend against strikes. The fight with Ngannou confirmed that. Regardless of ranking, it was clear that Stipe had absolutely no chance against Jones.
Of course, when the Jones/Miocic fight was first signed there wasn't any kind of a clear #1 HW contender or even a fairly deserving contender who wasn't a clear #1, so the booking wasn't completely crazy; might as well put a big name in the headliner if you can't put a worthy fighter there. Sticking with the booking after Jon was injured wasn't, on it's own, completely crazy either; there's potential value in letting fighters know that they won't lose their title shots just because the champ got injured, even if other fighters have new wins that make them more deserving contenders. What was, however, totally insane was sticking with the originally signed match while also establishing an interim HW title; either Stipe should have had to fight Aspinall for the interim title or forfeited his title shot once the decision to establish an interim title was made.