I suspect that creatives who just see their creations as a job to pay the bills will be replaced. There are true artists out there who will be just fine. I believe there will still be a market for true craftsmen who have intuition to create personalized designs in architecture, art, and design. I believe it's the engineers who should be most worried.
A.I. is trained on past human creations. Someone has to train the A.I. in the future with new ideas. Only the unlimited power of the human mind can create a truly original work.
You are correct.
The thing that has so many people spooked is the failure to understand that LLMs don't actually create anything; they simply process data to extract rules and relationships that describe how humans use the data elements (words, shapes, sounds, etc) and use it to process other data.
No different than other kinds of software, it is subject to GIGO.
It cannot displace actual human thought any more than any other form of software, say a word processor or photo editing software.
Much ado about very little.