Well put. I've found that agents are great at adding features to areas of the code that I already understand, where I can phrase my goals coherently and keep them on the rails.

Any attempt to describe software by "specification" leaves enough ambiguity that the agent will do deranged stuff like add a ton of code to satisfy error cases that can't happen. Or, like you imply, it will confidently create a bunch of nonsense to "solve" a problem in a way that is not really possible.