Disappears, notably, not destroyed. If the dimension the palace is located in was just returned to the collective unconsciousness, it'd also stop having a distinct, separate location apart from Mementos, and wouldn't appear on the Meta-Nav. For all the Phantom Theives are concerned, it "disappears". We only see the part within / altered by their cognition get affected by destruction waves.
As Milly put it, this is rather excessive nitpicking. The two terms are nigh-synonymous with each other, and from the context of the scene, it is extremely obvious that the quote refers to the fact that the palace was breaking down around them before they escaped.
Also
I'm saying that Yaldabaoth just sections off already-existing parts of the Metaverse for them to occupy, which is what we're explicitly told.
What exactly are you referring to? Of the scans listed so far, the only quote I can find that says anything even remotely close is the one from Shadow Shido:
"
Of course, I'm talking about our past selves. Such people are segregated from this peaceful world and locked away in their own palace."
This quote only states that the palace rulers are separated from Mementos, and that's how they end up in the palaces. The quote does not state anything along the lines of Yaldabaoth specifically sectioning off parts of the Metaverse created he created in advance, and technically doesn't even mention Yaldabaoth
at all (though it's almost certainly talking about Yaldabaoth contextually). At best, this information could
maybe be implied if we extrapolated far beyond the text, which we should avoid unless necessary.
If you were referring to a different quote or scan that I missed, my apologies. But as far as I can tell, nothing of the sort is ever explicitly stated in the entire game, which makes it very questionable compared to the constant statements explicitly making stating that the palace rulers created the entirety of their palaces.
For just one more thing, the palaces being created by Yaldabaoth explicitly contradicts what we are told about the targets in Mementos. I'm unsure if scans for this have already been posted, so I'll post them here:
Ryuji: "
Hm? What's that shinin' thing?"
Morgana: "
It's the bud of a treasure. Had we left it be, it may very well have blossomed into a Palace"
This exchange takes place immediately after defeating the first Mementos target, when the treasure bud is left behind. It's stated in other scenes that it is the Palace Rulers who deny the Prison of Regression, attempt to escape Mementos, and succeed who have their treasure buds turned into a Palace. If parts of the Palace had already been created in advance, then this entire exchange and the later references to this exchange would not be possible.