This is technically correct but missing some details.

The real GDP after accounting for cost of living has not changed much because while GDP has decreased, cost of living has also decreased (because A is now priced at 104 instead of 160).

But it’s even better because we have this extra money that we previously spent on C. In theory we will spend this extra money somewhere else and drive demand there. The workers put out of employment due to LLM will move to that sector to fulfill it.

Now the GDP not only increased but also cost of living reduced.