Textbook example of why this “economic” form of analysis is naive, stupid, and short-sighted, (as is almost always the case).
AI models will never obtain the ability to completely replace “low value work” (as that is not perfectly definable or able to be defined in advance for all cases), so in a scenario where all engineers devoted to these tasks are let go, what you would end up with is a engineers higher up the value chain being tasked with resolving the problems that result from when the AI fails, underperforms, or the assessment of a task’s value was incorrect. The cumulative effect of this would be a massive drain on the effectiveness of said engineers, as they’re now tasked with context switching from creative, high-value work to troubleshooting opaque, AI code slop.