It's obvious they're just using AI as cloud-cover to act like assholes in the typical ways in which they would normally act like assholes.
AI is in its infancy, it's just learning to crawl. There will be more breakthroughs which will have more serious consequences. Today engineers are safe, holding the AI's hand as it crawls around, bumping into furniture. What happens when it learns to walk, run, and win marathons?
But do you think that once that has leveled out a bit, the bandwidth/market bottleneck you referenced will be identified as the new bottleneck[0]? Like, new businesses will launch, or existing companies will identify new growth areas that they did not have the capacity to move into.
I don't know how to respond to your second paragraph. Looking in that direction is a bit too overwhelming.
[0] I think this was always the problem, not developer productivity
If the extra one or two employees are 2x or 3x as productive as they used to be, why would they not be employed? There will be plenty of market to grow into since the gains in productivity are shared throughout the economy.