This is true, but it uses an unfortunate industry term that is more pejorative sounding than it actually is.
When people in the industry talk about 'dumb money' they aren't talking about how informed or intelligent the order flow is. They are talking about how likely the order relates to market structure.
An individual investor who has looked at their portfolio and decided that the best move for their investment horizon is to move a big component out of equities and into bonds is still 'dumb money'. Even though that might be the most intelligent option.
A bot that has a terribly performing algorithm that takes market structure into account is not dumb money though.