That's not what "degradation of the commercial value" means. Not paying a license fee in a case where an artist could conceivably demand one in the absence of F

That's not what "degradation of the commercial value" means. Not paying a license fee in a case where an artist could conceivably demand one in the absence of Fair Use is not the same as actively undermining the market for the original image - which is what the law is actually concerned with. This is why posting free copies of other people's movies online is considered damaging. Even if you don't make money yourself, you create an option from a potential customer who would pay to avoid doing so. In this case, the pixelated version is on par with the tracks themselves - legitimate variations that are conspicuously different. Indeed, the presence and proliferation of noticeably derivative works like this tend to increase the iconic and commercial value of the source by creating the kind of halo effect people associate with "the original." It's entirely reasonable to assume that "Kind of Bloop" actually enhances the commercial value of "Kind of Blue", and everything associated with it.