Was about to say - it's not like they can do it worse. Now I prefer the Skyrim/Fallout approach where a core portion of NPCs are unique residents dwelling somewhere, with a rough believable schedule during day and night. But this would be utopia for a game like this, or say a game like GTA where many peds (pedestrians) need to be simulated, meaning you cannot have such a number as unique NPCs. Maybe in the future, every NPC and actor or person you see in a big city will actually have a home or place they stay and go for work, R&R, etc. But this is future stuff requiring better tech able to simulate a vast number of individuals uniquely.The good thing is that even if this was the worst case scenario, CDPR would probably still do it much much better than any other AAA dev or publisher. So even the worst case in CDPR is better than the best case elsewhere.
So until then we have to work with a few tricks, like GTA does. I don't want to always drag GTA in or see it dragged in for comparisons but in this case it's comparable. Peds pop in and pop out most notably when out of sight of the player. You could, at night, drive around an alley full of bums and then drive around the same small block, come back and see them all gone. In turn, if you were to clear them out by shooting in the air of course, drive 'round the block and come back they'd magically be there again. This can sometimes be an issue if the so called (ped) "persistence" is too low in time or radius. But there's mods for that so you can leave a bigger area and have the peds or their slots continue to be minded by the system.
In essence, we cannot expect the game to uniquely simulate most NPCs on the streets besides more unique ones, so we need to hope their "persistence radius" and time is big enough so we won't notice anything odd.