It favors recency in that more recently the sport is better than it used to be. But that isn't the same as with people's usual use of the term "recency bias". People normally are referring to fighters' recent streaks being favored over the fights that came immediately before them, i.e. "you're only as good as your last fight". Or people use it to talk about judging, in that actions from late in the round are favored over actions from earlier in the round, like with Conor/Nate II round 2.
If someone on my list were to go on a huge losing streak, it'd be for a reason. Either they lost because they weren't as good as I thought they were, and thus I was wrong. And it's possible I am. OR they lost because they declined as a fighter. Same thing with the guy who KO's the GOAT: why/how did he get the KO? How do I measure his skills, having acquired this new information? I have no problem with being wrong, but you thinking these examples being ridiculous to you show that you do.