My manager says you shouldn't be doing archaeology work looking at old pull requests and git diffs to figure out how things work.

Are there scenarios when this is useful? How common are they in your day to day?

I do sometimes to understand how things have changed. But not to understand how it's currently working.

Not 𝘩𝘰𝘸 𝘵𝘩𝘪𝘯𝘨𝘴 𝘸𝘰𝘳𝘬, but rather 𝘸𝘩𝘺 𝘥𝘰 𝘵𝘩𝘪𝘯𝘨𝘴 𝘸𝘰𝘳𝘬 𝘭𝘪𝘬𝘦 𝘵𝘩𝘦𝘺 𝘥𝘰.

I've never had to look at closed PRs or old diffs for anything other than troubleshooting.

Without git and looking at old PRs or commits, I would not be able to do my job, which is maintaining a complete mess of code.
I think you manager has a strange view of a programmer's job. Searching and code archeology will always be a part of programming.

"nothing new under the sun"

Whatever the task, chances are someone else has already done something similar that I can copy from. Start with old PRs, fall back to stack overflow 🤷🏻‍♂️