Reading this made me recognize that better interpretability yields not just better aligned but more compact models too. Which makes a lot of sense in hindsight, and even has some ironic ring to it when considering the unending amount of anthropocentric takes regarding what an "understanding" means.

Yes. The ultimate limit of which is a model that is an algorithm and no longer a pile of loosely connected data. Effectively we'd have taken a detour through data and training land to something that the early AI proponents would have called 'true AI'. It would be an engineered algorithm rather than a pile of neurons shaped by data.