Sounds a bit like the Adaptive Markets Hypothesis. In it there’s constant “evolution” between different trading strategies that become more or less efficient over time.

So here, Phase 1 would be a market dominated by EMH believers who passively invest. In phase 2, speculative “noisy” traders start to exploit this landscape to profit. In phase 3 there’s a crisis or period of high volatility. The old complacent EMH strategies suffer losses and become extinct. Then no doubt in phase 4 the market moves to some new equilibrium with new strategies dominant!

So in this AMH theory what you describe is a natural process of evolution.