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Abstractions are fine. Everything we do is a dozen layers of abstraction on top of the metal anyway.

It just happens that people who know how the bits actually move underneath the abstractions tend to be better at solving problems related to those abstractions, than those who don't.

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There are problems where understanding one level below the abstractions indeed leads to better solutions. However, I would argue that for a large set of problems, this is not the case. I think being aware of the abstraction (at multiple levels) would lead you to choose the right abstraction level for solving the problem. Of course, apart from school assignments, these abstraction levels are never given with a certain problem, so the more you know, the better you'll be able to see it.

To be honest, being able to think about things in multiple levels of abstraction is an advantage no matter what level you are (writing assembly or writing react)

It's because abstractions always leak. You are never completely insulated from the levels above or below you, nor sideways from the other components you interact with.

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