I agree with all that (that is on actual legal basis, not personal preferences on societal structure), and it’s all the more frustrating to think about the power asymmetry in the era of LLM trained on basically every written material that can be found out there, and in that case oh yes you absolutely can go with it regardless of how verbatim some code they output can be.
The more disturbing thing about LLMs is, it's "fair-use" to scrape everything for them, but it's a liability for the user to use the code, text, whatever.
If it emits a large block of copyrighted material, you'll be again in legal hot water.
Considering even fair-use can be abused (see what GamersNexus is going through) at-will, it looks even more bleaker than at first glance.
That seems totally reasonable to me. A large part of fair use is about the purpose of the use. It seems like a reasonable compromise that what is fair use in one context might not be in another. I can't think of any alternative to fair use that would make more sense.
I think the only unreasonable part is llm companies are implicitly or sometimes explicitly advertizing their products output as being fit for use in other projects. I think that is a false advertising problem.