if you’re working on novel code, LLMs are absolutely horrible
This is spot on. Current state-of-the-art models are, in my experience, very good at writing boilerplate code or very simple architecture especially in projects or frameworks where there are extremely well-known opinionated patterns (MVC especially).
What they are genuinely impressive at is parsing through large amounts of information to find something (eg: in a codebase, or in stack traces, or in logs). But this hype machine of 'agents creating entire codebases' is surely just smoke and mirrors - at least for now.