This is what I've observed with using AI on relatively small (~1000 line) programs. When I add a requirement that requires a different data structure, Claude will happily move to the new optimal data structure, and rewrite literally everything accordingly.
I've heard that it gets dicier when you have source files that are 30K-40K lines and programs that are in the million+ line range. My reports have reported that Gemini falls down badly in this case, because the source file blows the context window. But even then, they've also reported that you can make progress by asking Gemini to come up with the new design, and then asking it to come up with a list of modules that depend upon the old structure, and then asking it to write a shim layer module-by-module to have the old code use the new data structure, and then have it replace the old data structure with the new one, and then have it remove the shim layer and rewrite the code of each module to natively use the new data structure. Basically, babysit it through the same refactoring that an experienced programmer would use to do a large-scale refactoring in a million+ line codebase, but have the AI rewrite modules in 5 minutes that would take a programmer 5 weeks.
You don't need to be able to pass a leet code interview, but you should know about big O complexity, you should be able to work out if a linked list is better than an array, you should be able to program a trie, and you should be at least aware of concepts like cache coherence / locality. You don't need to be an expert, but these are realities of the way software and hardware work. They're also not super complex to gain a working knowledge of, and various LLMs are probably a really good way to gain that knowledge.
Bill Gates, for example, always advocated for thinking through the entire program design and data structures before writing any code, emphasizing that structure is crucial to success.
While developing Altair BASIC, his choice of data structures and algorithms enabled him to fit the code into just 4 kilobytes.
Microsoft is another story.