Compatibility levels and reported engine versions
Yes, you can ignore the reported engine version in Azure SQL Database.  This note was added to the @@VERSION function in March of 2018, so I guess it's not gonna change anytime soon:

We are aware of an issue where the product version reported by @@VERSION is incorrect for Azure SQL Database. The version of the SQL Server database engine run by Azure SQL Database is always ahead of the on-premises version of SQL Server, and includes the latest security fixes. This means that the patch level is always on par with or ahead of the on-premises version of SQL Server, and that the latest features available in SQL Server are available in Azure SQL Database.
To programmatically determine the engine edition, use SELECT SERVERPROPERTY('EngineEdition'). This query will return '5' for Azure SQL Database and '8' for Azure SQL Managed Instance.
We will update the documentation once this issue is resolved.