You are correct that Kolisi should be dropped — in fact, on my assessment he probably should not have played another Test after that 2013 performance against Samoa. However, rugby selection does not take place in a vacuum, and the Boks in particular are an emotional animal.
I don't think dropping him now, immediately before Baltimore, necessarily sends the right message to the rest of the side. He remains enormously respected within the group, he is the captain and figurehead around whom much of this series has been framed, and whatever we think of his present playing merits, those things carry weight within a Test environment.
There is also the practical problem that we don't have Kwagga Smith available, who for me is quite obviously the starting 6 on merit.
Kolisi has never been a particularly imposing physical presence in the tight exchanges, and historically the Boks have often got more value from him by using him away from the heaviest traffic — cleaning for the wider attacking units, working in the wider channels and performing roles that make better use of his mobility and work rate than asking him to live in the trenches.
That, for me, is the important point. If these players are going to be selected, whether we believe they are there on merit or not, then the coaches have to identify what they still do well and construct their roles accordingly. There is little sense selecting Kolisi and then asking him to be something he has never really been.
So while I agree with the broader argument about Kolisi, I wouldn't drop him for Baltimore. I'd instead narrow his role and put him in the areas of the game where he can still contribute most effectively. That's the approach I'd take for Saturday.