Hourly Billing Encourages Lying

That is a pile of false premises. You don't bill for ideas, you bill for implementation. you don't re-use old project work on a new client without their permission and negotiating the cost - doing so opens up all kinds of legal risks on both sides. AI has nothing to do with billing, they are simply paying for your time, and the same goes if your work doesn't go well.

You bill for your time. They pay for your time. That is all. If you find yourself coming up with edge cases where it doesn't seem like hourly billing is fair, you don't lie about your hours - you discuss it with your contact. Charging for different hours than what was actually worked is straight-up fraud.

The most important thing to take into account is liars don't get rehired.