Weirdly, I think Rare could probably succeed in today's Activision. At least as much as a studio like Vicarious Visions. I doubt they'd get to do new IP like Sea of Thieves or Everwild, but they'd probably be doing Banjo and Conker remasters and/or new games in those series, just as Vicarious found success with Tony Hawk and Crash remasters.
Just turning them into a meat grinder for Banjo and Conker remasters/sequels would probably be worse, if you asked anyone who actually works at Rare.
Rare went through some dark times, which seem to have been a combination of poor support from Microsoft at the time, as well as a string of games that simply didn't sell well.
However, these days they seem to be the healthiest they've ever been from just about every perspective. The work culture of modern Rare seems really great and positive, and you get a really upbeat vibe from all of their dev update videos and stuff. I recall reading an article about the history of Rare, that said when they were in their "golden years", the studio was very small and insular, and socially were very clique-y. The teams working on different games kinda kept to themselves, and were competitive.
FInancially their games are doing as good as they've ever done. Employee-wise the studio is the biggest it has ever been, with at least three separate teams working on projects, working at that same beautiful studio in Twycross. They aren't the studio they used to be, but no studio would be after 35 years.
The last 5 years or so, Rare seem to be mostly left alone to do what they want. Sea of Thieves had a bit of a weird launch, but is in a very good place now. Everwild looks aesthetically amazing, and while I was bummed it still seems a long way off, I kinda liked that the project head was so open in admitting that they are still prototyping the gameplay, and that Microsoft were giving them the time they need.
And not for nothing, but their Microsoft game output is underrated by people who just wanted them to make the same kind of stuff they made for Nintendo until the end of time. Viva Pinata should be considered a classic. Nuts & Bolts was an innovative game that didn't get the respect it deserved because it wasn't a "proper" B&K sequel. These kinds of games flopping is what probably led to them being assigned Avatar stuff for a few years in the first place.