This makes me wonder, as I've been many ask for an "AI government" and such, will our future societies be ruled by constantly-watching and always-listening AIs that follow the absolute most strict versions of the law and punish automatically anyone who breaks them in the slightest?

I remember a few years ago we were arguing about the fact that it's not a good idea to have a society where 100% of the people are punished for breaking the law 100% of the time, because then you can't have any progress. Who's to say the version of American society today is the the pinnacle of a modern society and that no law should ever change?

However, for change to occur, some people first need to break the law, and begin to make that new thing a culturally accepted thing before there's a strong enough movement to support a law change.

But if the AI automatically sees your first instance of breaking the law and then automatically punishes you for it, how is that change ever going to come about?

These things won't just "work themselves out" if by that you mean anything but people viciously fighting for their rights against an AI-totalitarian state over the next few decades. Just like AI today can sometimes make a mistake of seeing a helicopter instead of rifles, we'll need to keep "updating" the AI along the way to include these rights, and hopefully before too many people have to suffer in the process. Hopefully that process will be much shorter than the time it takes today from a law being passed by Congress to being shut down by the Supreme Court when found inadequate.