Here’s the historian’s logic, distilled:

During the third dynasty, Nayal had* a law about timber trading.
________
There’s some reason to think timber trading was happening in Nayal during the third dynasty.

Here’s the critic’s response, distilled:

In our own society, we have tons of current laws about stuff that isn’t happening right now.

The historian’s logic follows the general principle that “if there is* a law about [a thing] at [a certain time], [that thing] is probably happening [during that time].”

The critic notes that there are many current-day counterexamples to that general principle – we have lots of laws about stuff that isn’t currently happening.

This critic is suggesting, by analogy, that Nayal’s timber trade law might similarly be a counterexample. Assuming our current society is analogous to third-dynasty Nayalan society, there’s reason to suspect the timber trade law was just a holdover from an earlier age, and perhaps the timber trade had died out by the third dynasty.

*Both this summary and the critic’s response gloss over the important distinction between “laws that exist during a certain era” and “laws that were enacted during a certain era.” If you spotted this flaw in the critic’s reasoning – cool! The next question in this section is literally a flaw question about the critic’s response.