In practice
A 404 is the right answer for a page that never existed or has no equivalent. Do not redirect for the sake of avoiding it.
Give the 404 page navigation and a search box; it is a real entry point, not a dead end.
Why it matters
Honest 404s help engines clean the index, which is healthier than a mass of misleading redirects.
What matters is which URLs 404 — an internal link or a high-value old page returning 404 is a bug, not hygiene.
Related terms