While I was reading through this document: https://developers.suitecommerce.com/build-sustainable-and-stable-extensions.html#also-avoid-using-backend-core-modules I noticed that it is mentioned that we're supposed to avoid the usage of backend modules: SCModel, SCModels.Init since SC 2020.1. Even though all of our newer extension modules have been developed to use SS2.0 at the backend, some of our older modules still use 1.0 backend Models which have been extended from SCModel. We also use SCModels.Init for tasks like fetching a list of states, countries, user's credit cards, etc. (not for managing/processing the cart though). Does this mean we should convert all our 1.0 backend models to 2.0 right away? And what alternative do we have for SCModels.Init for things like fetching a list of states, countries, user's credit cards, etc.? (I could not find similar methods in any modules from Frontend Extensibility API)

There are no backend modules available in the extensibility API. If your customisations use SuiteScript 1.0 modules include in the core bundle then we cannot make guarantees that they're going to work from version to version. In general, you should not use them in extensions.