He wants to have his cake and eat it. He can copyright his work to have it protected, but won't because that would mean you know the name of the person who makes it. So instead he abuses the law by claiming a trademark - which he isn't entitled to under the law. So now someone has challenged his trademark and because Banksy isn't actually some anti-establishment rebel, he's using fancy lawyers and public pressure to get his way despite not actually being right as a matter of law.
The closest that UK copyright law gets is that there's an exemption for photographs of "sculptures, models for buildings and works of artistic craftsmanship, if permanently situated in a public place or in premises open to the public". (See section 62 at https://assets.publishing.service.gov.uk/government/uploads/... .)
But Banksy's pictures are just straight "artistic works". There's no need to class them as "works of artistic craftsmanship" and I don't believe any court would do so.
The infringers are either deliberately misreading copyright law or simply ignorant of it. I suspect the latter.
What is the difference between works Of artistic craftsmanship and artistic works?
His works are generally permanently situated in a public place. I would think that taking a picture of any random public wall with graffiti on it is legal. But you seem to be saying that there are two kinds of art, and that the kind that is “worse” gets protection, but the better kind didn’t get protection. Very odd.
The germane point is that Banksy isn't claiming copyright, he's claiming a trademark. He could stop them doing this if he sued them for copyright infringement but he's choosing not to.
If he painted something without permission on someone else's wall (for example), I don't have a problem with the owner of the wall trying to profit from it.
And if he painted something without permission on a wall owned by a Government, funded by "The People", I don't have a problem with anyone trying to profit from it via photographic reproduction (modulo local copyright / ownership laws of the country the wall is in).
Warhol made art from someone else's Campbell Soup cans and everyone loved that....
Interestingly, for the UK this seems to claim full freedom of panorama, seemingly contradicting the law quoted in your sister comment at https://news.ycombinator.com/item?id=21369261