People will still have the same incentive to work they always had (to make money) -- but some people will quit jobs they don't like, which will drive wages up (due to falling supply in the labor market). But the reason why UBI is so interesting now is that, with increasing automation, increased wages will have less of an impact on general prices. So prices will hold steady, as people continue to go to McDonalds.

Note that there are other ways to collect tax revenue: sales tax, VAT tax, property tax, wealth tax, etc.

UBI can only succeed if people continue to consume, preferably at higher levels than currently

What basis do you have for saying this? Deflation may actually be beneficial in a basic income scenario (falling prices makes a fixed basic income worth more).

If UBI encouraged too large a portion of the population to pursue non-taxable income (say, making art and games and giving them away for free because they don't need money), then UBI would collapse from lack of income.

Why would they give it away for free when they could sell it for money instead?