What would happen if all Bitcoin is mined and all Bitcoin is lost?
Lost means that if it can't recover then it will definitely become worthless. And if Bitcoin starts to constantly disappear from the total supply then of course Bitcoin will slowly increase in demand and the price will likely increase a lot.
However, since Bitcoin is decentralized and there is no way to increase the supply like paper money, the more Bitcoins are lost from the supply, the more pressure there is on the amount of Bitcoins left.