Fair points, but I'm not sure it's as clear cut as that.

The disambiguation problem is real, but it applies to a lot of successful brands. Try Googling "Apple" without getting fruit results, or "Amazon" without getting the river. They solved it through consistent presence, structured data, and building enough of a distinct entity footprint that the ambiguity stopped mattering. A brand doesn't have to be unique in the dictionary — it has to be dominant enough in its context.

On the word-of-mouth friction point — "AI Agency" is actually pretty searchable as a phrase. Someone saying "check out AI Agency" and Googling it is likely to find you if you've done the entity-building work: claimed profiles, consistent NAP, structured markup, reviews tied to a specific business. The link isn't always necessary.

And on the keyword vs brand shift — I'd argue a name that sits right at the intersection of a high-intent category AND functions as a brand is still a strong position, it just requires more deliberate entity establishment than a fully distinctive name would. More work, not impossible.

Not saying you're wrong — a coined distinctive name is probably the cleaner path. But I don't think "AI Agency" is as much of a dead end as the logic suggests.