Indeed, you have all kinds of estimation types. I would consider it to be quite insane to try to create small pieces and estimate these at the start or even before starting an initiative. The unknowns are far too big at that point. I think you then have no more than a rough idea of an initiative (small, medium, large) and that you should outline what you think is known and what you see as uncertainties.
At small pieces level I am not convinced that dropping estimates is required. But that’s my problem :-) But I don’t consider this to be the main issue with the #.
The main issue is with estimating/planning stuff with a lot of unknowns and then see that the organization treats it as set in stone. Bad management. This bad management would still be there when moving to NE.