> The better peer reviews are also not this 'thorough' and no one expects reviewers to read or even check references.

Checking references can be useful when you are not familiar with the topic (but must review the paper anyway). In many conference proceedings that I have reviewed for, many if not most citations were redacted so as to keep the author anonymous (citations to the author's prior work or that of their colleagues).

LLMs could be used to find prior work anyway, today.