A better policy might be for arXiv to do the following:

1. Require LLM produced papers to be attributed to the relevant LLM and not the person who wrote the prompt.

2. Treat submissions that misrepresent authorship as plagiarism. Remove the article, but leave an entry for it so that there is a clear indication that the author engaged in an act of plagiarism.

Review papers are valuable. Writing one is a great way to gain, or deepen, mastery over a field. It forces you to branch out and fully assimilate papers that you may have only skimmed, and then place them in their proper context. Reading quality review papers is also valuable. They're a great way for people new to a field to get up to speed and they can bring things that were missed to the fore, even for veterans of the field.

While the current generation of AI does a poor job of judging significance and highlighting what is actually important, they could improve in the future. However, there's no need for arXiv to accept hundreds of review papers written by the same model on the same field, and readers certainly don't want to sift through them all.

Clearly marking AI submissions and removing credit from the prompters would adequately future-proof things for when, and if, AI can produce high quality review papers. Clearly marking authors who engage in plagiarism as plagiarists will, hopefully, remove most of the motivation to spam arXiv with AI slop that is misrepresented as the work of humans.

My only concern would be for the cost to arXiv of dealing with the inevitable lawsuits. The policy arXiv has chosen is worse for science, but is less likely to get them sued by butt-hurt plagiarists or the very occasional false positive.