"If there is no longer a reason for people to live close together, decentralization is the most likely outcome."
Umm what? Humans are social animals and many people LIKE living in cities in close proximity to other people and close to amenities. I do not see a future where we decentralize and spread out because of AI.
We have also seen this play out with WFH/Covid. The recall into centralized structures, regardless of the technology available to mitigate the need, was fast and broadly applied.
Our current social structure is actively resistant to decentralization and I don't see that changing unless there is some forcing function to break that hold and keep it broken for new norms to settle into expectations.