I'm with you here, Neptune's definition seems to overspecify the extract from Oxford they presented.
If we boil stereotyping down to its core components, then it appears to simply be an instance of correlation using subjective and non-complete data: "This individual exerts traits a, b, and c, which means they are highly likely to also exert traits x, y, and z."
Or: "This individual is operating a car (unique trait/type of person), therefore their visibility and attention capacity are likely reduced or under strain (overgeneralization as driving might come natural to them, and fixed as I might assume that no one is a natural)."
^This is, of course, an oversimplification, as I'm going purely by Neptune's words and my own understanding, and have not looked up additional sources.
I've heard of people who have complained about trans people showing up in their dating feed, mixed in with the cis population, being labelled as "transphobes" and harassed, but good to know that we've overcome that.