That's pretty terrible because their retail site still needs a lot of work. Sort by stars has always been broken and the problems with counterfeit products and fake reviews needs to be dealt with.
I think it's a safe assumption that search isn't broken, it's just presented whatever way optimizes revenue while still using your choice of sort column as a guideline to keep it from being too blatant a lie.
It's broken from a usability standpoint. "Search by average stars" will give me pages and pages of 5-star products with tiny numbers of ratings before I'll see what I really want: a product with 1,000 ratings and an overall rating of 4.9.
Maybe Bezos decided that on that front mediocre is good enough and decided to move on to other sectors where the competition is more astute than in retail...