[mjr00]

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.