It's not explicitly deprecated yet. Shall we add a deprecation warning before 3.0? I just grepped through the code and there are loads of tests using it. Updating those tests to use the fixture decorator would be a nice low hanging fruit task.
Warning below was fixed in pytest-cov 2.3.1:
see details on pytest-dev/pytest#1684
pytest_funcarg__cov: declaring fixtures using "pytest_funcarg__" prefix is deprecated and scheduled to be removed in pytest 4.0. Please remove the prefix and use the @pytest.fixture decorator instead.