from Microsofts standpoint the shot across the bow for open source licenses is clear: do you have enough lawyers and experts to convince a gerontocracy of the legislative branch of the US government that its not "okay because its AI" because if you dont, then thanks for the code nerd.
Idk if MS is on the safe here. There's a straightforward legal theory for suing, and also parties such as EFF and others with a war chest and the determination to clarify this. Does MS provide indemnification to Copilot customers/users if those are sued by others? My advice would be to stay clear of Copilot.
If you think the US doesn't have enough existing legal theory on copyright to litigate this then you're crazy. It will be on MS to show that it isn't infringement.
I really want MS to try that theory in a court and win.
That will destroy the propaganda that the Law is there to protect content creators better than anything the people against copyrights can come-up with.