I assume PP would have no problem with selling prints. The point seems to be that the new bits in question (that replace the watermark) aren't actually transfe

I assume PP would have no problem with selling prints. The point seems to be that the new bits in question (that replace the watermark) aren't actually transferred but are created anew by the AI system, so it isn't sensible to claim that they are somehow being acquired illicitly, and the other bits were presumably acquired legitimately as well. I expect the 'silly' part is equating copying, or creating unauthorized derivative works, with theft. Although there is some confusion in the law about this (such as the title of the No Electronic Theft [NET] act), copyright infringement and theft are different from each other in important ways.