The academy awards are literally nothing more than any other industry group awards: it's just people in the industry telling each other how awesome they are.
They are, and always have been, utterly meaningless.
To be fair, of the nominations that year, I’d have given it to Jack Lemmon for The Days of Wine and Roses. So it’s not like it’s uncontentious that O’Toole was snubbed.
It's just an industry meat parade designed to get you to watch their bullshit.