I don't think the transcendance mechanic from Humankind (advancing to the next age with current civ) would really work in civVII, for two reasons:
The ages are larger, if we had an ancient and classical Era, going to Egypt in classical doesn't quite feel out of place. But in civ VII going to the next Era with Egypt would mean bumping heads with...the Normans? Second reason being, there's particular mechanics to each era and civs are using said mechanics, it would put you in a disadvantage automatically unless there were a set of "vanilla" mechanics for civs to use, but at that point are you really playing Egypt in Exploration? or just vanilla template no.3
To your point about peoples not just dissapearing, I absolutely agree, one thing I'd love to see is pops with culture tied to narrative events, and visual style. So for example, our Egyptians turn into Abbasids, well yes, and most of our population is still Abbasid (and their housing still is Egyptian), and we could get a series of narrative events about managing our population to either assimilate them into the new identity or hold to the old one (or go for a multicultural empire). That way we could have very Abbasid Egyptians, or very Egyptian Abbasids. couple that with conquered peoples and it could open a lot of oportunity, to show that civs don't just dissapear but are built on top of one another and keep evolving.
I think the main problem of civ switching will be very alleviated once we get more civs to flesh out the "historical" and regional paths
Now once they run out of the usual suspects I'd love to see plausible alt history, or civs that are either sandwiched between the blurry era limits, for example, if Khmer can be Antiquity, I don't see why a Western Roman empire couldn't be Exploration and live side by side with Byzantium. All this to say, that once civ VII development reaches the point in Civ VI when it started to add magic, heroes and vampires, I'd rather they add plausible "what if" civs with interesting unlocks,.
Personally I would have liked it to be 1 more era, and split Antiquity into Ancient and Classical, as it's the longer time lapse, that way we could have...(to bring our Egyptian example back) old Kingdom Egypt and New Kingdom, and civs like Sumer and Babylon could have their time before the likes of Rome and Greece show up.