I think having an activity or obligation of sorts helps. If they are left to their own devices, it's a lot of work to create a routine.
My grandma has sort of regressed as well due to COVID. She didn't go out as much, and her leg muscles atrophied enough that she needs a cane now. She stopped going to church. She doesn't go to the senior center anymore. She's not as active as she used to be and it's a bit alarming to see because there's a snowball effect to her mental health, her physical health, and overall well being. She is not excited anymore and has lost a lot of enthusiasm and is more negative instead of optimistic about things.
I think the only thing keeping her together is having a personal care assistant who she can manage/boss around every day so she's got something to do during the days. That's about the only thing she uses her brain for now. I think without that daily ritual she'd be a vegetable.