I feel that simple lane-keeping is different. I mean, that's all Autopilot is: Traffic aware cruise control and automatic lane keeping. That's all it is. It does not navigate. It does not obey stop signs, traffic lights, etc. It won't even change lanes.
Technically, yes, AP requires babysitting, but it's at an entirely different level from FSD on city streets. Highway driving requires less attention than city driving. You're mostly keeping eyes forward with the occasional check of your mirrors. City driving requires lots of looking around, more turns, more lane changes, and overall just a greater awareness of what's happening around you. When driving on FSD on city streets, you still need to keep that heightened awareness, so it's useless.
Highway driving is just drudgery. Maintaining speed and a lane. AP removes the drudgery. Babysitting it just means making sure it doesn't suddenly decide to swerve or abruptly change speed, whereas babysitting FSD means doing the exact same checks for oncoming cars and traffic signals that the car is doing.