Yes, I think this is exactly right. The labelling of a thing as “AI Generated” or “AI Assisted” makes the viewer perceive it as worse in quality. And they really do think it’s worse.

It’s similar to a well known finding about price: people value things that are more expensive more, and tend to think they are of higher quality. You can give people the same thing for a high price or for free and they’ll say the high priced one is amazing the free one is lacklustre.

It’s like an optical illusion driven by labelling.