I agree. But I'd suggest your walls aren't suitable for dry-lining, you need wet plaster to bond it together.
Get it all off, get a couple of gallons of SBR sunk into it then get it properly plastered. You don't want a super-smooth surface for tiling. I don't know what best practice is these days, some might prefer cement render rather than plaster in a bathroom.
In my case/photos, the top skim came off with the old tiles in the shower area, and remained where it wasn't previously tiled. I tiled over the lot, managed to straddle the lip between the two halves without it being at all visible now. I used a liquid tanking kit in the shower area, over the rough plaster. It looked weird and drank the stuff up but worked really well. The bumps are good for the tiles to grip onto.
Don't use any pre-mix tile adhesive. Get slow setting powder mix. Powder is cement based, pre-mix can't be otherwise it would set in the tub, it's probably acrylic or similar but IMO inferior to cement. Cement will set underwater so has to be sold dry.