The issue I have with that is that the PE ratio metrics they're largely using are against traditional average ratios.

The asterisk on that metric is that as capital available to lending institutions increases, which comes from the expansion of M2 combined with bank lending appetite and cost of money, the "price" component expands, which since the 1990s has been slowly pushing the average P/E ratio up.

We're currently sitting around the mid-2019 level for the S&P 500's combined P/E ratio.

The thing is... the Fed's not going to suck all of the expansion of M2 out... in fact, probably about 25%, mostly to investment houses, has escaped already and won't be called back. Some of it's in longer term bonds, so that's not coming back right away. There's a lot of uncertainty around how much the Fed will draw down on the balance sheet, with some people guessing a full reset down to 2019 levels, but I would say the pain to get there relative to the gain is not going to allow for that to happen... and current Fed projects indicate that there's no appetite to restrict to reduce the money supply to that extent, reducing the pull-forward from like 10 years to a couple of years is probably enough...

...which still leaves the banks cash-flush and with lots of money to re-enter the market that institutions began pulling out in 2021.

Once stock return projections get higher than the risk-free rate of return again, that should float the P/E ratios up higher than the expected 2019 baseline. Of course individual equities will have their own dynamics, but the flow of the market will also dictate to some extent whether they have strength or not.

In other words, current market pricing could be based in an overly pessimistic view relative to the amount of capital that will be looking for a home in a market reversal... it's safe for them now to take a risk-averse approach, and not wrong to do so given the unknowns... but the reasoning behind their argument regarding P/E ratios has a blindspot.

Edit to add: Prior to the 1990s, the range on the P/E ratio is tighter, in part, because money expansion was generally tighter and because Glass-Steagall meant that more of that M2 expansion made it into the real economy, meaning the 'E' part of 'P/E' was more likely to scale with stock pricing.

What happened in the 1990s other than an explosion in investment speculation and a bit of a change in monetary policy and a tech bubble? GLBA and Glass-Steagall were repealed, which opened the doors to more intermingling of S&L and investment house funding. That drives the 'P' part farther than the 'E' part of the ratio can run.