I don't even mind text interpolation in helm that much. Yes, it's horrific, but it really doesn't become problematic until you are having an external system render the text being sent to helm that might be processed again after the fact with Kustomize. Your text might hit literally 3-4 different YAML rendering pipelines before it finally hits your cluster. Insanity
Hashicorp had a similar idea to this configuration language you are mentioning. They named it HCL. We do know how that turned out, but maybe that was more questionable design rather than problems endemic to the approach.
What takes effort for humans, takes effort for AI too.
And yeah, HCL was a horrible design. Anything else would have been better, Cue, jsonnet, dhall, pkl, etc. (I'm not sure which of those existed when HCL was created.)
String interpolation is a pox on the ecosystem, especially given how YAML was only originally a debug helper...