Yes, it was a bit jarring, and it's a common criticism. I would point out that with such an effort to do things like sepia tones and old timey photo montage, it's a bit out of place. That being said, it makes it feel like a modern-day movie, as this kind of incongruity wouldn't feel so out of place if it were made in last ten years or so. Another way this movie is part of an American New Wave at the time?
I'm certainly no expert in Western movies (it's not a favorite genre unless there's some twist or subversion in its presentation) but I don't think it's necessarily implausible. I remember that the movie took a while to get produced, as studios didn't like the "non-John Wayne"-ish elements of his heroes. In that respect, it seems that Westerns even up to 1969 were still expected to be quite tropey, more melodramatic/ less nuanced in its presentations of characters.
Hmm. This makes me think that the faceless "white hat" chasing Butch/Sundance gets raised to the level of metaphor-- our "heroes" of the movie are literally fleeing the archetypes that want to do them in.