This isn't just an issue of code. You can write a program that combines songs, or combines novels creating a different work that has sections that are essentially the original protected work. I don't think the authors of those novels are going to be OK with you selling or giving away a version of their work just because an AI edited it or combined it somehow.
The mechanised license ignorance and the way original authors are not compensated is the issue.
If you had a repo you'd worked really hard on, and offered a commercial license or GPL depending on the use (so you can be funded to work on it) ... do you think it is fair that copilot ingests that code and allows others to benefit from your work and knowledge without the commercial license as you intended?
Note how Microsoft always throws out the capitalism "rules of engagement" when it benefits them and undermines everything else. The fact we are even trusting the situation Microsoft are creating is dire, and speaks to the short memory of our industry.
See: https://twitter.com/mitsuhiko/status/1410886329924194309
This is my feeling as well. I don't build stuff in the open so that I can get bent out of shape at someone not properly licensing it. It's in a public repository, FFS... I assume that if anyone even notices my repo, that they may copy/paste a few lines out of my solution if it helps them.