You're right, AI generated pictures should not be copyrighted, as is the case today. People should be free to mix and remix pictures via AI as much as they desire.
This is where I imagine things are going to get into trouble because how are you going to determine what is AI and what isn't? Especially when Stable Diffusion is directly classifying artist and cloning their signatures and watermarks. What about things that are started with AI and refined by human?
Exactly. The relevant law is with regard to the use of artwork on the part of the people who feed the index. Artists should have a say on whether their work gets included in a training set, if their works are not public domain.