The layoffs have already happened though. Companies are cutting massively even when it's supposedly good times. That's the story.

Massive amounts of people with unsustainable lifestyle will stop consuming stuff. How will the whole capitalist economy continue to function with massive amounts of medium-high income people not having the same income anymore ?

It's complete market failure.

By the time the AI bubble bursts, those that have investments in those companies would have already exited.

Then in 10 years time, they will look back at how they scammed the back off of the layoffs with AI driving the entire problem.