The article is saying the opposite what you have posted. The problem with the PLAAF is the lack of real combat experience. And the pilots are stimulated to perform via competitions like the Golden Helmets. Although it has help to improve the skills of the pilots but the problem is that these competitions more and more resemble sporting events than combat training. Like pilots trying to run out the clock to gain points.
I believe that something like the Golden Helmet competition is fostering the wrong kind of skills. The Golden Helmet competition is about one on one dogfights. That is a archaic form of aerial combat that belongs in the era of WWII or Korea. Today aerial combat is about different units and types of planes working together as a single whole. While the Golden Helmet competition is about individual glory. The exact opposite of what you want to encourage.
The article makes the mistake of presuming that the entire form of "competitive DACT" is a flawed form of exercise with little utility -- rather than just one of many forms of DACT that is included as part of a pilot's training for aerial combat, and whose utility is entirely dependent on the way in which the rules, parameters and structures are laid out and refined over time.
"Self defeating" is a strange term they've chosen, and I would rather describe it as "can be more optimized than it already is".
Golden helmet is just one form of DACT, and DACT is only one component of large force exercises (where all of the moving bits are put together at a major exercise range) like Red Sword.
Personally I think golden helmet is a perfectly fine exercise to have in context of the full variety of other exercises that the PLA has.
The way the article describes it, portrays competitive DACT as if it is actively damaging or corrosive, which is bizarre.
