Have been teaching coding to kids professionally for a while now. Ultimately what works is what the kid will engage in. Some kids bounce off of Scratch completely but then get totally hooked on text programming. I've been following what little has been published around teaching coding with AI, I'd say it's inconclusive at best which also tracks with my experience. We don't totally ignore it, since it is a standard development tool now, but if the environment is not tightly constrained it can be detrimental, it can quickly spit out a bunch of code that makes the student very overwhelmed.

You'd be surprised what kids can make once you give them the basic building blocks: https://jump.academy/projects/fruit-drop

Sometimes we will let them use AI to make a focused change to their project, like "make the character do a flip when he jumps", then they're getting a fairly controlled diff surrounded by a ton of context, which I think really does boost their coding "literacy". I'd rather my students be able to read code well than write a for loop from memory, so I've found it useful in that sense.