I agree that they can be a trap, but I think that is remedied by requiring a small project proposal step.

Ensures that students have a plan, that the goals are achievable, and can help to spread out the project's points.

Also helps when profs make it clear that they're more concerned about seeing what you know/learned and how you approached the problem, not whether or not you achieved exactly what you promised.

Sounds like a very valuable learning experience.

LLM over-reliance has an analogous problem: People start using LLMs to start projects that get in over their heads, then when the LLM has gone through all of the easy and medium problems they're left with only the hardest problems to solve on top of a project where they didn't learn much doing the easy and medium parts first.