That's true, and the Xingyi from that period was transformed and merged with elements of Longmen boxing arts.
Referring to Wudang as a unified entity is misleading. Today, we see the Sanfeng daolu, often described as 'Yang-style Taiji with low stances,' but there are also Longmen, Songxi, and Chungyan traditions, along with remnants of Dan Pai, Ziran, and others. The latter two had ceased to exist as independent lineages by the early 20th century. Therefore, it's essential to trace the so-called Taiji of Longmen and Songxi back to their likely sources—there's no need to attribute these arts (Longmen and Songxi pai) to any government scheme or institutional design.