It is not bad, just not needed anymore. But was not removed for the sake of compatibility I guess.
Since Java 10, we have the native "var" keyword, and it does almost exactly the same thing as Lombok's "var". Using the "var" keyword in Java is not a bad practice.
And although certainly there are some contrived cases where using "var" is bad, the same could also be said about any other feature of the language.
Lombok also features "val", which is the immutable version of "var". People of Oracle/OpenJDK/etc also considered that, but they felt unnecessary and considered that "final var" was already good enough.
And except if you are targeting Java <= 9, it is just better to use the regular keyword instead.