If this were the consequence of using AI to cheat on an assignment, no one would use it for sure.
This recently happened in Germany and the university was actually even stricter. The student handed in AI-generated exam work and it was so egregious that the university considered it fraud and banned the student from re-taking the exam, which meant that the student couldn’t graduate and had to drop out. The student sued but the court upheld the university’s ruling. The work apparently contained typical AI-marvels such as citing sources that don’t exist.
There will always be people who think they can get away with it, no matter the potential consequences.