The book does not "stop taking bets" on the entire event in question. The book simply has to limit the "sharp" individually. Of course then we get into the whole cat and mouse game of chasing sharp action through straw bettors and playing games of information theory (i.e. how much money can a sharp win while still plausibly not outing themselves as an obvious sharp).
The book only would have a serious problem, if the entire world became sharp and every bettor was betting sharply. But alas there you have a paradox: anyone who is currently a sharp, has a strong self interest to preserve the secrecy of their models and methods, because knowing something that nobody else knows is precisely what creates their edge. And so therefore, as long as sharps have this self-interest, then there is no problem for books to keep operating, and the problem is reduced to one of identifying and limiting sharps occasionally (basically a "cost of doing business" that books acknowledge).
The only way for the scenario you describe to happen, is for disinterested actors with no thought of profit for themselves, to not only "solve" a particular market, but also release it to the entire world and make it a commodity. I'm not saying it's impossible, but I'm saying that normal economic incentives work against this outcome.