> AI content can not be copyrighted and so the rights can not be transferred to the project. At any point in the future someone could sue your project because it turned out the AI had access to code that was copyrighted and you are now on the hook for the damages.

Not quite. Since it has copyright being machine created, there are no rights to transfer, anyone can use it, it's public domain.

However, since it was an LLM, yes, there's a decent chance it might be plagiarized and you could be sued for that.

The problem isn't that it can't transfer rights, it's that it can't offer any legal protection.