They can shift production from consumer goods to war goods, but total productive capacity won't grow dramatically. Productive capacity will likely decline due to the large number of able bodied men sent to their deaths or to be maimed.

You don’t just press a button that says “war economy” and then everything turns out fine. You drive massive inflation, weaken consumer markets, take on massive debts and eventually run out of young men.

Pretty much every nation bar the US was on the verge of economic collapse by the end of WWI (and Russia’s did). The financial burden of two world wars killed the French and British empires. Germany’s WWII war economy was totally unstainable and the USSR’s was bankrolled by the US lend-lease program.

It’s not a panacea - it’s just what you have to do to drive enough military production to sustain a near-peer conflict.