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I've seen these custom fields tables in a number of database schemas I've worked with in the past. It adds dynamism to a fixed table structure. I wonder how CRMs do it these days without having poor performance at scale?

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Being able to partial index into JSON has made this much more straight forwards now than ever before, but historically pre-creating empty indexed custom columns was somewhat common (leading to hard limits like max 20 custom tags), as was EAV (which arguably is inner-platform).

There are more solutions than these, but until you're at truly custom DB scale with a specific problem here, these will solve it for you.

I've also seen a system that instanced the database per customer and simply extended the schema with additional columns.

That worked great... until the thousands of instances had to be merged into a single unified schema.

yeah, generally instancing a table per customer is an old smell indicating they have either a permissions issue (no RLS) or you're using a db which doesn't support partial indexes (which basically everything does now).

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