My son is in a CS school in France. They have finals with pen and paper, with no computer whatsoever during the exam; if they can't do that they fail. And these aren't multiple choice questions, but actual code that they have to write.
This was 30 years ago, though - no idea what it is like now. It didn't feel very meaningful even then.
But there's a vast chasm between that and letting people use AI in an exam setting. Some middle ground would be nice.
I wrote assembler on pages of paper. Then I used tables, and a calculator for the two's-complement relative negative jumps, to manually translate it into hex code. Then I had software to type in such hex dumps and save them to audio cassette, from which I could then load them for execution.
I did not have an assembler for my computer. I had a disassembler though- manually typed it in from a computer magazine hex dump, and saved it on an audio cassette. With the disassembler I could check if I had translated everything correctly into hex, including the relative jumps.
The planning required to write programs on sheets of paper was very helpful. I felt I got a lot dumber once I had a PC and actual programmer software (e.g. Borland C++). I found I was sitting in front of an empty code file without a plan more often than not, and wrote code moment to moment, immediately compiling and test running.
The AI coding may actually not be so bad if it encourages people to start with high-level planning instead of jumping into the IDE right away.