> Does a digitally encoded version resemble a copyrighted work in some shape or form? </snark>

Well that's different because an encoded image or video clearly intends to reproduce the original perfectly and the end result after decoding is (intentionally) very close to form of the original. Which makes it a clear cut case of being a copy of the original.

The reason so many cases don't get very far is that mostly judges and lawyers don't think like engineers. Copyright law predates most modern technology. So, everything needs to be rephrased in terms of people copying stuff for commercial gain. The original target of the law was people using printing presses to create copies of books written by others. Which was hugely annoying to some publishers who thought they had exclusive deals with authors. But what about academics quoting each other? Or literary reviews. Or summaries. Or people reading from a book on the radio? This stuff gets complicated quickly. Most of those things were settled a long time ago. Fair use is a concept that gets wielded a lot for this. Yes its a copy but its entirely reasonable for the copy holder to be doing what they are doing and therefore not considered an infringement.

The rest is just centuries of legal interpretation of that and how it applies to modern technology. Whether that's DJs sampling music or artists working in visual imagery into their art works. AI is mostly just more of the same here. Yes there are some legally interesting aspects with AI but not that many new ones. Judges are unlikely to rethink centuries of legal interpretations here and are more likely to try to reconcile AI in with existing decisions. Any changes to the law would have to be driven by politicians; judges tend to be conservative with their interpretations.