AI can definitely do all aspects of game development now, but this advice seems to mostly apply to small indie titles or experiments.
For example, the Thing approach is reasonable for a small game, but it's a dead end for a performance budget or layered subsystems. In a reasonably sized 3D game, iterating and copying 30 subsystems of 1000's of Things is impossible to do in frame time, the only fix is a total rewrite of literally everyThing. That's why there's ECS, SOA, etc. which needs a different kind of harness.
Also, art completely dominates the production cycle of modern games, which (even if AI generated) needs its own category of harness not mentioned here. And AI can be very good at optimizing, but samply won't diagnose your overdraw, and GPU needs its own ablation and attribution.
For the time being there's no panacea and we still need "game developers", though the bar for prototypes (and certain genres) is lowered.
"Thing" style systems are very common in AAA. I link to the interview with the Dreams (Media Molecule) team where they describe a system very much like this. ECS is also not mutually exclusive here.
Kyle seems smart and I enjoy some ideas on his podcast and blog. But I do think his many strong opinions about how games should be developed are reflective of a lack of experience shipping stuff with an actual playerbase
It's conceptually interesting but I don't know it is instructive beyond simple projects