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Even worse: the longer this is the case, the higher the skill floor is, eating into mid and senior level roles until we’re only left with “distinguished wizard architects” and their fancy autocomplete

I've run into the same thing. So many jobs only want people with 5-10+ years experience in something very specific, and there's always somebody else who's a better fit. Job search sites show such a tiny percentage of entry-level openings lately.

Been thinking about this a lot lately

The market is rough for junior designers too. Cannot get my foot in the door!

I noticed that companies hire overseas and are more willing for entry level positions overseas because they will take less salary too on top of this trend of hiring only experienced.

Omg YES this is infuriating. It's back to the "You need experience" "How do I get experience?" "You get a job" "Okay well you're hiring, can I work here?" "No, you ned experience" There's gonna be a senior shortage that's gonna hit them so hard they won't know what to do.

I feel like the market has been like this for a while now, which means that the correction is hopefully just round the corner.

I agree but the issue is complete reliance on the free trade especially in entry level where it's already hard enough to get a job even with a degree.