“There is a population of qualified workers […]”

In my experience, this is not true. Demand for software engineers has been so high, and pay so high as a result, that it’s pulling in workers from adjacent industries. The total software-qualified workforce is larger than the set currently working in software, and people with transferrable skills move in and out of software as incentives dictate.

A number of my current and former coworkers are from math and physics backgrounds (CFD, energy, etc…). These are folks that before might have stayed in academia, or ended up in aerospace, defense, or other engineering fields.

If everyone over hired, demand drops, and companies drop pay as a result, I’m sure we’ll see some folks in software with transferrable skills move to other industries.

You may be right but it's not high pay alone that draws in people from other industries. Standards must be relaxed to accept people from unconventional backgrounds. When conditions tighten, many of these people are simply not competitive enough to get another job. When it comes to aerospace, defense, academia, etc., opportunities are more scarce in those fields than in software the past few years also. It is this, not just the pay, that drives people to software.

I'm not saying people with odd backgrounds can't ever make it. But let's be clear, these are not usually hot shots who can simply get any vaguely technical job they want. They get into software because it is traditionally very accepting of uncredentialled or non-mainstream individuals. The framing you put forward makes it sound like the people committed to software are chumps who have to take what they're given, and these interlopers are the real geniuses who leave for greener pastures with ease. That simply isn't true.