There's hard research to support the idea that it is not a moral panic and that there are serious long-term effects for both individuals and societies. That can be true at the same time as the "think of the children" people weaponize that rhetoric for their own ends, as well as the long term trends you point to. I don't think it serves anyone to turn your argument FOR those points down into an argument that these "moral panic" concerns are probably made up.

It literally came to light in court filings that Meta has specific prompt guidelines for how AI bots on its networks should go about having sexual encounters with minors, with documentation for cases as young as 8 years old.

The same billionaire who pushes this shit is in league with the most-documented child sex trafficker in the history of the world. Where there's smoke, there's fire. There is absolutely no reason to give the social media companies benefit of the doubt.