I can't imagine SWEs will be reduced to SDETs anymore than attorneys will be reduced to spell-checkers on AI powered case briefs.
I am a very AI-forward person, but hallucinations are becoming more pernicious than ever even as they get less frequent, especially if the code actually works. A human absolutely has to guide these processes at a macro level for sustainability for SaaS as it evolves with business needs.
Maybe for one and done systems with no maintenance/no updates/no security patches you can reduce humans to SDETs, but systems like that are more the exception than the norm.
By SDET I mean one who reviews not writes code, maybe we have different definitions of that term because you also mention humans being needed to guide the processes.
Even still, other professions interact with the real social world which is not necessarily the case with programming. A lawyer will always be needed because judgments are and must be made by humans only. Software on the other hand can be built and tested in its own loop, especially now with human readable specifications. For example, I wanted to build an app and told Claude and it planned out the features, which I reviewed and accepted, then it built, wrote tests, used MCPs including the browser for interacting with the UI and taking screenshots of it, finding any bugs and regressions, and so on until an hour later it came back with the full app. Such a loop is not possible in other professions.
I've noticed even more than the "hallucinations", just the code is generally quite bad.
At least with concurrent and distributed systems stuff (which is really all I know nowadays), it is great at getting a prototype, but the code is generally mediocre-at-best and pretty sub-optimal. I don't know if it's because it is trained on a lot of mediocre and/or buggy code but for concurrency-heavy stuff I've been having to rewrite a lot of it myself.
I think that AI is great for getting a rough POC, and admittedly often a rough POC is good enough for a project (and a lot of projects never get beyond a rough POC), but I think software engineers will be needed for stuff that needs to be more polished.