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This either ends at "better than 50% of human novels" garbage or at unimaginably compelling works of art that completely obsoletes fiction writing.

Not sure what is better for humanity in long term.

That could only obsolete fiction-writing if you take a very narrow, essentially commercial view of what fiction-writing is for.

I could build a machine that phones my mother and tells her I love her, but it wouldn't obsolete me doing it.

Ahh, now this would be a great premise for a short story (from the mom's POV).