The 25 year limit is just a guideline. Most coaches under go mid-life rehabilitation about halfway into their service. At the end of the codal life, if the the coach is still in good condition (because of continued good maintenance, better build quality etc), then it will be continued in service.
Unfortunately this 'good condition' is usually limited to the ride quality and the health of the bogies, suspension, shell etc and not the interiors or exterior looks. So it is common to conclude that the train is running with 'old, worn-out coaches' or that the zone is running old coaches and trains (and the zones operating them) with old coaches do get a bad reputation.
In...
more... many cases, it is indeed true that the quality check is not done rigorously on old coaches, as the CDO would be trying to get as much use out of its rakes as possible. But in many cases, the coaches themselves would still be ride-worthy (no reduction in safety), albeit with a worn-out look.