I've yet to see AI-generated video which _doesn't_ have this sort of problem; everything moves unnaturally and physics doesn't work properly. Unless it can shed that nightmarish quality, it's DOA, and it's not at all clear that it _can_, via current techniques.

I would actually wonder if AI generation of 3d models and movement instructions, coupled with a conventional physics engine, might be more viable, though it would obviously rule out attempts at photorealistic stuff.