Is more workers to achieve the same total outcome a desirable state? It seems like what you’re proposing doing there is literally wasting entire human work lives for zero productive output.
If you took this to an unrealistic extreme, where 100% of all jobs are automated, every cent of profit flows into the hands of owners and shareholders, and there's literally no job that labour can take, that's clearly and obviously worse. The flipside, where efficiency is at it's lowest, and every single product ever is hand-crafted with a tremendous amount of labour seems obviously bad too.
Of course, those are both ridiculous extremes - the answer to what balance is healthiest for an economy I'm sure is immensely complicated. I'm just saying that efficiency doesn't come without costs, and we shouldn't design our entire economy completely around the interests of shareholders of major corporations.
It seems like your automated example allows a welfare state to provide a better quality of life than we currently enjoy. Having people do pointless jobs for the same income at that point seems inherently worse.
That said, I have serious doubts that everything can be automated as that suggests all human labor would be providing zero value.
