Isn't the Quranic mention of the Children of Israel being favored above the worlds evidence of their superiority in prophethood, knowledge, miracles, and culture?

The word "al-ʿālamīn" (worlds/peoples) in the Quran is used with two applications: a general one, referring to categories of nations, and a specific one, applied to the people of each category or era, considering them as a "world" (ʿālam). "Al-ʿālamīn" is the plural of "ʿālam," which does not have a singular from its own root, like "al-anām" (mankind) and "al-raht" (a group of men). It includes categories of nations such as humans and jinn.

As for the verse, ﴿وَأَنِّي فَضَّلْتُكُمْ عَلَى الْعَالَمِينَ﴾ (And that I preferred you over the worlds), it means preferring the ancestors of the Children of Israel over the people of their time. This is a specification of the general لفظ (word/utterance), so the preference was during their time, before the existence of the Ummah of Prophet Muhammad (peace be upon him). Allah the Almighty has clarified that the Ummah of Muhammad is better than the Children of Israel and more honored by Him, as He says: ﴿كُنْتُمْ خَيْرَ أُمَّةٍ أُخْرِجَتْ لِلنَّاسِ﴾ (You are the best nation produced for mankind). This preference does not contradict the previous preference of the Children of Israel, because the preference of the Children of Israel was before the existence of Muhammad's Ummah. However, after its existence, it became the best of nations.