It's the same studios. They do work both for Hollywood and ad agencies.
But if ad agencies decide they're happier with lower-quality AI for 5% of the price (whereas they weren't if junior artists were still 50% of the price), while movie producers are not, then yes. They can make movies instead.
Does that "make sense" enough for you...?
No matter which way you slice it, you're not doing anybody a favor by eliminating their job. People generally already work the best job they can manage to and by eliminating that job you're making them pick another job they otherwise wouldn't have picked, or worse and more often, leaving them without a job because they were already working in the best job they were qualified for.
The whole "now that these jobs have been eliminated, the former workers are free to find a new job!" thing is bullshit cope. Always has been. They were already free to chose another job, and chose the one you think you're 'freeing' them from. You're not giving them choice, you're taking it from them.
There still aren't enough senior-level VFX artists in a Hollywood. It continues to be a blocker.
Genuinely don't know what you're talking about.
There's massive demand in Hollywood for good VFX people. It's not some luxury job or something...?