Re: Begging the question
Firstly, at least some of the works do exist in some encoded form within the models, both LLMs and image generation models have been shown to be able to regurgitate things that were in their source. Just because it's not stored as plaintext or a png doesn't mean it's not in there. That particularly situation is not much different to creating some self-extracting archive format and then claiming whatever you put in it is not a copy because it can't be extracted with normal tools.
Secondly, the luddites were at least partly right. You can paint the complainants here as "the arty 'creatives'" if you like (presumably a group that contributes nothing to society), but is the end goal really just to replace people with machines? At least ultimately devices like washing machines or assembly line robots save people from repetitive hard and dangerous tasks, but now we're really starting to cut into roles that actually give people some degree of joy or meaning. It's easy to paint this as democratisation, hey now anyone can generate images that would have taken them much longer and years of training before! Except it's not freed anyone from anything. The people who loved doing that in the first place will no longer be able to do it as their livelihood, the rest of us end up with something that's no longer special and for the privilege we all pay the people who own the things (built on stuff they stole in the first place).
Easy to say that what AI systems are doing in remixing old (often still copyrighted) works is no different from what people do, but the point is that it's people doing it. Those exceptions, for education, for criticism and reporting are for the benefit of people. Copyright was created with the intent of protecting people from unauthorised duplication of their work, to allow a livelihood from creating works of art, often these days it's swallowed up by corporations.
One of the promises for automation and industrialisation has always been that it will free people to lead better lives, without drudgery. So, we got rid of the weavers and the miners, then the typing pools, now we're going after the drivers, the writers, the artists, the programmers. What happens when we've replaced every job? It hasn't actually resulted in people working less, just more things that the wealthiest can claim rent on.