Correct, N64 and PS1 era projects can essentially always be strictly tackled one function at a time. There are very minor things (like string literal sharing) where some earlier function can affect later function, but the workarounds are comparatively simple.
On the other hand, I have heard even old MSVC is a nightmare. Various things are affected by hash table ordering (so the names of variables matter in some situations), stuff like order of #includes mattering, etc.
Yuuuup exactly. I guess this is masked because old 90s games are often more culturally significant so people haven't found these problems yet but yes, these are serious challenges.
On the other hand, I have heard even old MSVC is a nightmare. Various things are affected by hash table ordering (so the names of variables matter in some situations), stuff like order of #includes mattering, etc.