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Though I'm not an expert I find this hard to believe because even actual commercialized prior art seems to be no barrier to patenting something[1].

[1] https://homepages.cwi.nl/~paulk/patents/isnot/node9.html

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The patent application you link to was never actually patented. The USPTO rejected the application and the applicant abandoned it.

https://patents.google.com/patent/US20040230959A1/en

I'm a former patent examiner, and from that experience, I know that attorneys frequently write things in applications that they think probably won't be allowed. They're testing the limits of what will be allowed.

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