Is that even true anymore? I feel like it was true four years ago; Walking Simulator definitely started off as a derogatory label, but I think it has more or less become essentially neutral. If it is still meant to be derogatory then it has most certainly lost all its impact. Also, there have been multiple games in the genre that have received praise. Not exactly a biting criticism, if you ask me.
This is probably off-topic, but to the best of my understanding, the idea is that the term 'walking simulator' is considered derogatory or pejorative because it's incredibly reductive. It's just a lazy way of talking about games with limited interactivity or that focus more on storytelling or exploration by insinuating that moving around is the only thing you do. In reality, the walking part of such games is often secondary to things like puzzle solving, interacting with and inspecting objects, reading in-game documents, etc. and just generally exploring the narrative.
The criticism here is then that Jeff is alluding to the fact that Kojima might have misinterpreted the one aspect of these games that people are most likely to criticise them for as their defining feature and something to emulate or build on, whereas you could argue that the walking in games like Gone Home or What Remains of Edith Finch is just an unfortunate or necessary byproduct of their developers trying to move players between the more important and engaging aspects of the game.