it just means that the assumptions we are making in the first place is wrong? nothing here is a dead-end because essentially we are at the same place before. people might even go ahead and say now if it's n^1.5 what happens, what results can be true.
i feel like you are arguing there is -- even in the narrow utility of PROOFS -- there is a goodness in being an ostrich with its head in the sand. If that's true, people can still be that ostrich and pretend the bound is now n^1.9 or something.
I edited my comment just as you answered, but I'll also say it here in a different way.
The actual conditional result was "if problem A is essentially this difficult, problem B is essentially that difficult". A specific formulation of it was proven, but it depended on a specific assumption that was just shown false. But the general result is still probably valid, because the general assumption holds. But there may be no point in going through the effort of proving another specific formulation, when the automatic theorem factory could just come up with another technical improvement targeting that formulation.
I started in theoretical computer science, but I quickly drifted to more applied areas, because I was annoyed with how often theoreticians would confuse the map for the territory. But if AI can now do that much more efficiently than any human, perhaps theoreticians will have to rethink how much they should focus on specific provable statements.