The reality is when all the menial jobs are automated, you have to reclassify anyone not capable of non menial jobs as disabled, create busywork jobs that don't give value / actively don't automate things just to create jobs, or provide UBI.
Maybe the first option combined with better education would work, but UBI seems like the best option. It should also cut costs around welfare and, morally, I think it is right - everyone should be able to live, regardless of ability.
I think the idea of UBI as incentive is dangerous because it leaves a lot of potential for rug pulling when it sees success.
I'm curious about why you think UBI as incentive would be dangerous, especially in the scenario I described. Doesn't this already work in Alaska? What kind of rug pulling you expect it might happen?
As to it being an incentive - if you provide a UBI as an incentive, you will presumably get people moving there to receive that UBI. When enough people have moved to the place and the incentive is stopped, it could easily cause huge issues as those people who moved will be relying on it.
It's probably only an issue if the UBI is high enough.