The uni I recently graduated is also very confused regarding what to do... Things have converged towards less hands on assignments and more theoretical exams, something I know for sure I would've hated during my studies.

It's awkward, you're very unlikely to stop students from using AI for certain assignments (i.e: first programming class) for the good of their fundamentals, but there's also no other teaching tool being used to get them equivalent experience to solving assignments without AI.