If they were constantly re-pathing around each other though you would certainly also run into issues too.
Why shouldn’t the units use the information they have about the current destination and path of the other allied units instead of just constantly seeing them as moving obstacles.
In the case of SC1, the dragoon in particular was really bad because its speed would change significantly depending on which part of the animation it was in. That’s what made wheeled vehicles and tanks were less wonky. Their speed was constant as they moved.
If obstacles are handled separately, you do the same thing except it ends up being a line intersection between nearby agents' routes. Find route intersections, estimate arrival times, if they conflict based on both units' movement speed, reroute.
Another approach would be to ignore unit as obstacles and rely on movement timeout: If I'm stuck for longer than X time, reroute.
If the pathing of SC had been "great", the game mightn't have taken off the way it did competitively.
There were more important factors, like having the limit to 12 units in a group - any more would make Zerg much more powerful - now Zerglings are easy to use en masse. Terran bio would benefit from it as well.