What do you mean? As far as I know, the context is that Miyazaki hated it because it reminded him of a friend with disabilities. That's why he said it was an insult to life itself.
Miyazaki's attitude to tech in general is ambivalent, isn't it? He used to be very conservative and traditional, yet in Princess Mononoke you can tell he used some CGI.
I think I agree with his approach: the work/vision comes first, and tech can be used but not as a gimmick, and always careful not to overpower the artistry.
I agree it's taken out of context in current AI discourse. It's just a fun anecdote.
> For what the demo actually was, Miyazaki's reaction didn't make sense.
Hard disagree. Miyazaki explains his position in the video (reminded him of a friend with disabilities, etc). Plus there's an aesthetic and art sensibility to his opinion; this is Miyazaki, not just any other author. The failure was probably on his subordinates, they forgot who they were demoing to.
It's like showing a 3D game demo to someone who fundamentally dislikes 3D in games (or gore to someone who dislikes gore, etc). I mean, sure, it could land... but most likely it won't.
It doesn't really say much about AI in general, this was Miyazaki's personal take and an amusing quote that is too much fun to resist mentioning.
Getting 3D models to move in a natural way through RL is largely a solved problem. And listen to what they were saying in the video. Whatever they were demoing there, they were also thinking of using for a zombie model in a video game. Ragdolls in video games wasn't a new concept at the time either.