If that was my role I'd totally forbid it, precisely for the reasons you indicated.
If a developer is paying on his own for it to work, who would have the legal responsibility in the end? The developer personally? Another good reason to stay away from it.
That being said…I think this line of thinking is probably mostly a nothing-burger at this point. My experience is that anything sufficiently complicated that Copilot outputs is likely to be somewhat wrong.
I’ve only really found it to be (quite) useful for speeding up small things like if statements, switches/matching, short documentation etc, which I don’t think you can copyright anyways. I wonder to what degree we can expect customization options in the future to forbid any complex code from being generated, or to constrain Copilot to helping with specific whitelisted
Perhaps, extending that last thought, there’s an ideological argument to be made that code that is so simple an AI can generate it isn’t worthy of being protected under copyright law anyways. I don’t know.
Right now it's only individual developers, placing the burden on them and preventing any major repercussions for Github.
This changes when (large) companies start using it, and when GitHub gives potentially copyrighed code to companies.
Personally I only use it for personal/OS projects right now, not professionally.