Is Bitcoin truly scarce?
Yes Bitcoin is deliberately limited in that there can never be more than about 21 million BTC.
No the existence of other forms of money does not affect this characteristic of this particular form of money. It is an intrinsic characteristic.
Yes the potential for new forms of money means that money in general is unlimited in terms of the sum of the numbers printed on the front of banknotes etc - but this number isn't especially meaningful. The actual collective value of all available forms of money is determined by external factors.
None of this affects that there can never be more than about 21 million BTC. Bitcoin is truly scarce in that sense. This is true whether it takes 10,000 BTC to buy a pizza or a nanosatoshi to buy a Ferrari.
There's little point in indulging in philosophical wrangling over this. The only significant effect of this form of scarcity is a deflationary influence on the value of Bitcoin. Or at least the lack of an inflationary influence at a large scale or in the longer term. There are other things that have inflationary or deflationary influences on Bitcoin. That is, external factors that influence its value either way.