Some small indie studios would become AA studios and some new small indie studios would appear, so it's ok. At least for some time the industry would partially heal.
It would probably be pretty short, like 2-3 years. That investment money and those employees are going to go somewhere, so probably to the larger AA studios.
But the good news is that AA and indie games are available today. That's mostly what I play, so AAA games being a thing doesn't really impact me.
My brother, we are in that Renaissance right now. Lethal Company, Palworld, Balatro, Helldivers 2, Pacific Drive, Go Mecha Ball, etc. And we're only 2 months in, let alone the insane amount of gold in 2023, and upcoming games like Hades 2 in 2024.