I expect earlier iterations successfully circumvented local regulations and created high street bookies

Not surprised actually. TBH this is the biggest gap in the “AI is can make you a website”, the aesthetics are always so boring and bland, or often just fugly (bad colour matching, inappropriate paddings and margins, etc). And the logos it generates are similarly boring. As can be seen from the smiley face logo here. What does this store sell? A sparse layout as designed in a high rent location typically sells very expensive, very niche products that you can’t get anywhere else. This seems to me like it has already failed.

Agreed. I assume the products were decided upon based on market research of the area. Maybe though the model will be able to iterate and adapt faster than a human CEO would? I guess we will just have to wait and see

It looks like every "lifestyle" company / brand I've been seeing come out of Millenials/Genz . Next up it will offer "coaching" on IG or some similar play where it promises to fix your life without having fixed its own.