The theory is that productivity increases will in fact offset it. One way to prevent an increase in money causing inflation is to correspondingly increase the value generated by the economy. Some economic theories, including the current dominant mainstream one, would suggest that if you have that sort of productivity increase you need to increase the money supply to avoid negative impacts brought on by deflation.
One of my several major problems with the idea is I see almost no one trying to figure out how to actually bind the productivity increases together with UBI. Even if I stipulate for the sake of argument a perfectly functioning UBI system working exactly as the advocates propose, as gracious as I can possibly be, it is still a fragile system. Droughts, wars, asteroid strikes, volcanos, bad crop years, supply chain disruptions, normal economic variations including recessions, these things all happen. The productivity excess will shrink at times, but, no politician under any political governing scheme could reduce the payouts, and after long enough on UBI, the hypothetical paradise it produces full of wonderful artists and musicians and programmers creating text editors rather than CRUD apps and people just enjoying life also produces an economy full of people who can't help get the economy back on its feet when there is a disruption... but they're still there with their hands out.
