I think it was the spell-checker analogy that really sold me. And this ties in with the whole point that "AI" isn't one thing, it's a huge spectrum. I really don't think there's anything wrong with an interviewee using an editor that highlights their syntax, for example.
Where do you draw the line, though? Maybe you just don't. You conduct the interview and, if practical coding is a part of it, you observe the candidate using AI (or not) and assess them accordingly. If they just behave like a dumb proxy, they don't get the job. Beyond that, judge how dependant they are on AI and how well they can use it as a tool. Not easy, but probably better than just outright banning AI.