I have two systems at FPBX 14 Asterisk version 13. They are on the same subnet for testing purposes. Both are pretty much at default. I have setup the IAX trunks many times and never had this problem. I have a single phone registered to each. Outbound routes setup for Intra company and also the extensions in the dial rules. IN the IAX report it shows that the trunk is connected. Both extensions calling to the other results in a “All circuits are busy” message No obvious entries in the log, just says it is busy Just for grins I changed the secret on one side and they still reported that they were connected.
In a broad sense, no IAX is not broken. That being said, IAX was moved to Extended Support (community/contributor driven) about 4-5 years ago. That means that Digium/Asterisk developers no longer address IAX (and even Chan_SIP) features/issues. They will still merge valid commits from contributors for features/fixes but that is the extent.
There could have been changes in recent versions of Asterisk, such as auth=plaintext being fully removed from IAX so there could have been modifications that impact your IAX configuration until it is brought to more current settings.
At this point, I would look at migrating over the PJSIP for whatever you’re using IAX for.
There have been no meaningful changes to chan_iax2 in… years. Latest one that was chan_iax2 focused was… March of 2017. The rest is just mass changes or fixes. I’ve also seen no issue reports stating problems, so it’s likely configuration or something outside of Asterisk.