This is not recent, part of the compulsory licensing for covers is that the cover does not substantially alter the original song. This boils down to substantial alterations of the melody or (possibly) lyrics.

Don't the rights of the writer depend on the similarity of the cover to the original? If the the alterations are sufficiently substantial, the author of the previous version shouldn't have rights over the new version.

If the alterations are substantial, then it's a derivative work. If it's in any way derivative, the author has complete authority over the new work. It is outside the domain of compulsory licenses at this point.

Well, parody, while derivative, certainly is not subject to the control of the original author (remember the Luke Skyywalker case).

I think the courts should have a very liberal definition of what is transformative -- the permissions culture has gone way way too far (this infects both civil and criminal law in the USA and Europe).

Sure, parody is fair-use as per Justice Story, but that's where this all gets gray. You can claim fair-use, but unless it's quite obviously a parody or educational, etc., you're going to have a tough time if someone has a mind to sue.

What about works that are inspired or influenced by other works? Nearly all works are. In some homeopathic sense they might be derivative. I assume there's a grey area between that and clearly derivative works.