Here's why Minecraft works: It's an ecosystem full of carefully-designed areas and resources (biomes fine-tuned to generate specific types of landscape, enemies with focus-tested behaviours, items with particular abilities) which combine to form a sandbox where players can exercise ingenuity and build projects that satisfy their creative vision.
Where does generative AI fit into this? Should it be generating an infinite variety of dull and unoriginal items that don't do anything cool? Should it be building derivative-looking houses for players to ignore or burn down so that they can build their own houses in their place?
LLM-generated slop has no place in games. It is an obstacle to having a good time.