Is it still considered to be an OK practice to use htaccess to render PHP in HTML files for things like a navigation/menu?
I used to do it back in the day for smaller sites that didn't really need a CMS, but I wasn't sure if it's a faux pas these days.
It's purely up to you. It doesn't pose any threat to your site or expose any vulnerability so it doesn't matter either way. Rendering a PHP file with an HTML extension is no different than one with a PHP extension.
In fact, if you're migrating a static site to dynamic one, it's actually a good way to preserve page URLs.