If the algorithm (whatever it is) evaluates its own output based on whether or not the user responds positively, then it will over time become better and better at telling people what they want to hear.

It is analogous to social media feeding people a constant stream of outrage because that's what caused them to click on the link. You could tell people "don't click on ragebait links", and if most people didn't then presumably social media would not have become doomscrolling nightmares, but at scale that's not what's likely to happen. Most people will click on ragebait, and most people will prefer sycophantic feedback. Therefore, since the algorithm is designed to get better and better at keeping users engaged, it will become worse and worse in the more fundamental sense. That's kind of baked into the architecture.

> I'm of the opinion that there isn't such a thing as objectivity

So you have rejected objective reality over accepting the evidence that "AI" contains no thinking or intelligence? That sounds unwise to me.