The whole point is to spend money and to be an honest signal https://en.m.wikipedia.org/wiki/Signalling_theory

In the event artificial diamonds are genuinely indistinguishable from natural ones they will all, natural and artificial, become worthless aside from practical applications.

That's a really, really dim signal though, right? You literally need a microscope to see the signal.

A higher-end Rolex knockoff is indistinguishable from the real thing to the naked eye of a casual observer, and yet people still buy the real thing for 10 times the price.

Brands will make themselves known as the more expensive option. People don’t give cubic zirconia engagement rings as is because they’ll look cheap if they’re honest and be outed as a cheap fraud if it’s found out that it’s not a diamond when they pretended it was.

De Beers will find a way to make aspects of the jewellery other than the gem identifiably theirs. Then when you’re caught pretending a $100 lab diamond ring is a $6,000 natural diamond De fBeers ring you’ll be in just as much trouble as if you’ve given them a cubic zirconia.

But even that surely is less useful these days?

In the west we're no longer living in a time where most people get married and then start their lives together. People often cohabit for years before marriage, and with more women working and earning as well the "hey I've got money and I'm dedicating a chunk to you!" signal isn't so much of a thing.

Sylvester McMonkey McBean at work.

Yes, this is a form of signaling in social psychology, an interesting phenomenon that happens with originals versus "replicas."