It gets pretty complicated to answer in one post, but I'll try to give some quick answers.
How does the AI enhance modularity? That's not exactly what's going on. Basically, the modularity aspect was achieved at the very beginning, and it just has to do with breaking down all the physical aspects of cinematography so as to make a lot of work reusable or interchangeable. A 35mm flat horizon shot of a tree at noon will composite well with a 35mm flat horizon shot of a forest at noon, and so on. Understanding the key rules of this inherent modularity is great, but we had to build a system that took advantage of the possibility.
First came control. UE5 is used to create the original images. This is because for that modularity to exist, lego 68 and lego 783 must have EXACTLY the same aspects in several metrics. Then finished UE5 takes are fed through the pipeline into the AI stages for recomposition. So our AI images can't be "random" like the grand majority of what you see out there is, more like style transfer that creates detail and composition on the fly.
I'm using a long chain of AIs with scripts and automation, but the core AI platform we're using right now is Stable Diffusion, albeit a HEAVILY modified version with many extra models and controls connected. Just an off the shelf will make you plenty of good pictures, but keeping animation coherent, mass processing roto masks, automating ai batch upscaling, and so on requires a good bit of effort to learn.
Basically, when I talk about the AI multiplying the inherent advantages of the modularity, I mean that it provides us with a near infinite set of content options for a given camera and scene scenario we create. So, having a bottle of coke that never looses it's fizz would be great, but if you had a bottle of coke that never lost it's fizz and had the same amount in it no matter how much you drink, that's on a whole different level.
So now that it's set up for modular, and we can create content based on rulesets that make everything uniformly modular out of the gate, it's a powerful combination.
TLDR Movie element lego factory. Tell the robot to only make parts that fit, then suddenly all the parts fit.
Here's a more sophisticated shot, showing the beta stage limitations. The leaves were a test to see if I could get away with using certain layers without running them through the entire pipe, but people noticed, so I can't use that.