That is correct.
Shortly after 9/11, Pakistan decided against the use of 'non state actors' as a cheaper tool of foreign policy. The detente between Musharraf-Vajpayee and then Musharraf-Manmohan, by 2005, was a practical and huge concession given by Pakistan in the hope that somewhere, down the road, there would be some semi-solution. The semi-solution did come in the form of a sensible agreement on Kashmir between Musharraf and Manmohan: Effectively, the Kashmir issue was to be 'shelved' and LoC = IB was to be at least a temp solution.
The agreement was more unpopular in Pakistan than in India. Attempts were made on Musharraf's life by Kashmir-related entities.
There has been much in between then and now. But the major cause of the current escalation is that a significant portion of IoK is again rising against India. That is not trivial. Even some Indian journalists manage to accept that.
Coupled with the geostrategic environment, the CPEC possibilities, the intense desire to 'contain China, the aggressive govt in India, the strategic, albeit low key, backing by Uncle Sam... India is hellbent on destabilizing Pakistan right now--at a time when Pakistan would VERY MUCH have preferred to have kept the tensions as low as possible.
And it should be obvious to all by now: India is going to wait till it is strong enough to really openly strike Pakistan so long as the Modi mindset persists. And strike it will! And, so, with reluctance, I have to agree with the OP's strategy: Pakistan should get out of the Musharraf-Manmohan detente now--India already has.