It would still compress the distribution wouldn't it?

Imagine UBI of $490k per day (I'm using silly numbers to prevent silly arguments) while poor people are previously earning $10k per day and rich people are earning $510k per day. That is rich people earning 51 times as much as poor people and (regardless of inflation) getting 51 times as much stuff. After the UBI the rich get only 2 times as much stuff as the poor. There will be a redistribution of stuff, the exact amounts are hard to calculate, but if it doesn't crash the economy, rich people will have less than before and poor people will have more, even if the prices are higher on average because there's more money.

You can’t just move assets of that scale around without knock-on effects.

If it was just cash - then payments of that scale would definitely be inflationary. People with debts would gain, lenders would lose, you’d create a bunch of instability in the money markets, and I don’t like to predict the long term effects. In real terms you’re probably going to hurt more people than you’d help.

If you’re imagining a scenario where that level of largess is backed up by huge gains in the real economy, then yes the people receiving it would be better off. But where would that productivity come from? In this scenario the people who sell stuff that the UBI recipients would be buying would be far more wealthy. You wouldn’t close the wealth gap, you’d cleave it apart like the sky and the land.

Yes, a UBI (really all government spending) re-allocates demand, either directly through taxes and transfer or by decreasing the purchasing power of the currency through inflation. At any point in time, there is more or less a set amount of productive capacity in the economy, and money is what allows it to be allocated.