You're right, I've followed the litigation closely. I've advocated for years that "training is fair use" and I'm generally an anti-IP hawk who DEFENDS copyright/trademark cases. Only recently have I started to concede the issue might have more nuance than "all training is fair use, hard stop." And I still think Judge Alsup got it right.
That said, even if model training is fair use, model output can still be infringing. There would be a strong case, for example, if the end user guides the LLM to create works in a way that copies another work or mimics an author or artist's style. This case clearly isn't that. On the similarity at issue here, I haven't personally compared. I hope you're right.