Plagiarism has an element of copying someone's work. You could arguably say that they copied AI's work, but that's a stretch.
It clearly is cheating, but not plagiarism.
I predict that it will become more and more prevalent that AI output is accepted as a work product as a matter of efficiency, and organizations shying away from it will be at a handicap.
Use of analytical tools to detect AI generated prose will be an arms race easily thwarted by tools designed to trick the analytical tool. Either by making the AI engines more sophisticated to generate content with a more human flavor, or by simple post processing tools that will ruff it up.
This can even be seeded by the student's own prior work, so that any generated content will match the student's style, personality and vocabulary. Even level. A C student suddenly writing A+ essays would get caught pretty fast upon closer investigation.
It seems long tem the only reasonable and certain way to force students to complete work in person, is to do the work in person without electronic aides. More frequent tests. And allow assignments (ungraded) where AI assistance is allowed and encouraged.