There is a world of difference between "seems pretty clear" and risking a copyright infringement lawsuit.

Who exactly creates the image is not the only issue and maybe I gave it too much prominence. Another factor is that the use of copyrighted training data is still being negotiated/litigated in the US. It will help if they tread lightly.

My opinion is that it has to be legal on first amendment grounds, or more generally freedom of expression. Fair use (a US thing) derives from the 1st amendment, though not exclusively. If AI services can't be used for creating protected speech, like parody, then this severely limits what the average person can express.

What worries me is that the major lawsuits involve Big Tech companies. They have an interest in far-reaching IP laws; just not quite far-reaching enough to cut off their R&D.

It’s a tool to you. To someone less tech literate, I can see where they don’t see a difference between this and uploading a copyrighted logo to vistaprint or your custom credit card design.