Wouldn't be a good comparison. They specifically agree she has copyright over the whole work+arrangement, so the short as a whole is 100% copyrighted. Netflix used AI for the background images, so those are the only parts that might be public domain, but you also don't know how heavily edited or modified by hand the backgrounds are (and realistically, they probably were a lot); this would also grant a copyright (and they deny her the copyright on the grounds that all her edits to the images were trivial). So "Dog and Boy" is quite safe under their novel interpretation.
There are significant differences between the cases; in that Netflix case, img2img was used to generate more details from scenes that were already fairly fleshed out and drawn. That process seems more analogous to running a picture through Photoshop filters.
There's certainly a blurry line here, it's never going to be 100% cut and dry. I can copyright a figure drawing I do, but I can't copyright my drawing of a straight line. Maybe text-to-image can't be copyrighted, but image-to-image results can. Going to take a long while to resolve this.