The problem isn't the classifier free guidance itself, but the choice of parameters. When a parameter above 1 is chosen you get images which very stronger conform to theme, but which there's not a good mathematical justification for.

Yeah, it must be some algorithmic thing like CFG, or some other technique, that causes the unrealistic AI look. Because Dall-E 2 didn't have it, but Dall-E 3 did to an extreme degree. Google's Imagen <= 3 also didn't have it, but Imagen 4 (and Nano Banana, which seems to use Imagen 4 in the background) suddenly had significant AI look, apart from much better prompt following and fewer visual mistakes (like too many fingers).