What killed this deal is that the author did not set aside enough time to do the work, and then lost interest. This seems pretty clear from the post. From my reading, it looks like the author was missing deadlines before they even brought up the topic of AI. And then continued missing deadlines and pushing out the schedule even after they said no to the AI ideas. And then ultimately put the whole thing on hold and never picked it back up.
If the publisher said “put AI in this or we kill the project”, your reading would be correct. But I don’t see that anywhere in this write up. I see an author who didn’t deliver. Not even the first third, so there wasn’t even an advanced payment.
And to be clear, I am not hating on the author here. Life happens. Interests change. All I’m saying is that this project was not canned because of the refusal to put AI into it.