I have often wondered if the corollary to this is that without constraints design becomes unnecessary. I used to play Fortnite and PUBG a bit and the UI there clearly suffers from excess of available computing power.

Game devs should develope and test on average hardware, but that's hardly the case.

It’s less about performance and more that they can throw insane UI and graphics at it because the hardware will render it. It’s all bad design.

It's a well-known effect in the study of creativity. And it's not just the presence of significant physical or engineering constraints, even the presence of minor arbitrary constraints can spark creativity in unrelated aspects of the work.

For example, 'Weekend Film' competitions have long introduced minor arbitrary constraints only announced at the start to prevent pre-work, such as "Blue socks must be seen and at least one character must have an accent". Often, the socks would be only be seen in the background for a few frames and the accented character would be a passerby overheard for 2 seconds, yet filmmakers, judges and audiences found the presence of the constraints caused all the projects to be more creatively diverse in completely unrelated ways.

Interestingly, the effect doesn't have one name. Artists and designers have terms for it, cognitive psychologists have another term, behavioral/organizational sciences and engineering/innovation research each have their own literature as well.

Creativity comes from listening.