The tyre screeches are still as bad as ever. Are tyre screeches so loud like that in real life it drowns out an engine?
Not really, no.
I mean, if you take a normal or only slightly modified street car and go drifting with it, yea, tires are gonna screech fairly loudly and persistently.
It shouldn't be the dominant sound in a 500hp+ tuner car, even when drifting. It shouldn't be a dominant noise in most regular track situations and especially with race cars built for grip.
GT overdoes it, definitely. The screeching is too easily provoked and it's a very one dimensional and very loud screech, so it grates. Another problem is that GT is a fairly forgiving sim, even with all the driver aids off. So often, you can really push to and over the limits of a car and get away with it. In fact, the fastest drivers tend to slide the cars around quite a bit, exploiting the forgiving and non-hardcore physics. In something like Assetto Corsa, the type of driving you can get away with in GT would not only result in spins and crashes, but even if you can manage the sliding, it's not going to make you FASTER in most cases.
So in the end, GT not only has tire screeching that is easily provoked, but the game also encourages you to slide the cars around, where the tires will obviously get screeching quite constantly.
I can only hope they have a slider for the volume level for it like many racing games have now.