Sounds like a pretty bad experience indeed - surprised that was their recommendation vs completely anonymizing the data. You didn't share if you went ahead with

Sounds like a pretty bad experience indeed - surprised that was their recommendation vs completely anonymizing the data. You didn't share if you went ahead with it and saw any results? If so, it sounds like they were not good. Either way, I don't think you can let one bad experience cast doubt on a whole field. There are plenty of example of medical research institutes using synthetic data in combination with real patient data to improve their neural nets. I'm no medical expert, but data augmentation or full simulation works when it's used in the right context. Having said that creating biased algorithms that generate biased data is certainly a reality as well.