There are two things here, firstly, Without AI, you can have heavily designed environments or you can have procedurally generated, people manage to make both work. Both can also fail because of reasons specific to the approach. Careless procedural generation can produce a poor variety or nonsensical outputs. Careless specific placement can violate any rules that a game has established creating an incoherent experience.
Making a world internally consistent by explicit placement gets harder as you increase in scale. When internal consistency is a factor impacting quality, there is a scale at which generated content eventually becomes the higher quality solution.
Secondly, when generating content with AI, the same rules around carelessness apply. There are certainly generative AI tools out there that offer few options when it comes to composing what you want, that is not a necessary part of AI, some of it is because people are wanting rudimentary interfaces, some of it is that the generators are sufficiently new that the control mechanisms are limited because they are focused upon doing something at all before doing it highly controlled, in some ways the problem is that things are new enough that it can be hard to describe what is desirable controllability, making the generator to see what people would like it to be able to do is, I think, a reasonable path to follow prior to creating the control that people want. Part of it is also that there _are_ tools that give a high level of control over what is generated but far fewer people get to see them. There are ways to control styles, object placement, camera motions, scene compositions, etc. The more specialised you get, the smaller the subset of people who need that specific control.
I think AI can make things possible for people who could not have done so without them, but it's still going to take care to make something special.