Moguri Mod is a great example of AI done right. A fan modder ran Final Fantasy IX's original assets through stable diffusion models to upscale the graphics and corrected imperfections by hand to create a great HD graphics mod with decent quality 30FPS FMVs (the official ones are low quality and capped at 15FPS.)

For context, Square-Enix's Final Fantasy IX port was quarter-arsed (only really adding battle skips and a fast-forward function), and as they didn't even have the original assets to do a graphical remaster, Moguri Mod is the best well likely get until/unless Square-Enix decide to remake FFIX from the ground up.

AI remastering done wrong would be a recent online rerelease of the Super Mario Bros Super Show, and an update done to Killer 7's Steam version a few months ago. Both were remastered with AI but zero effort was made to correct any inaccuracies or hallucinations.

Where I think AI could be really useful is in animation: specifically in speeding up the process of inbetweening. If you fed a decent model key frames and prompts to have it produce tween frames, you could heavily speed up the process.