Mind games are like subtle uses of spacing, or conditioning an opponent in a certain way so that when you use a move, they never would have expected and it fits perfectly. Mindgames are just as present these days. However, most players, as they get to a higher level are already aware of many characters gimmicks and tricks so it becomes more difficult to effectively do so. Most likely the opponent is already aware of the trick etc, but your superior conditioning/reading allows you to pull it off. This is what makes mindgames even more hype, because its not just using a trick they didnt know about, its about tricking them mentally so both reading and conditioning come together at once.
Also mindgames can work inside and outside of the game too. For example, if you train your opponent by always over exaggerating when you tech rolls, jump, etc by moving your controller and arms more visibly, on occasion you can move your arms and fingers to act like you are going to roll, jump, etc and you can trick them into responding to your body movement... when in actuality you haven't committed to anything yet. Sometimes it can save a stock but like mango says, don't overuse your tricks keep them for the unexpected times.