If Copilot generates the exact same code as the source, I don't see how that process could be exempt, it's like using the clipboard on your PC with extra steps.

It can generate the same code, but generally won't.

So Microsoft should provide blanket protections to the developers that use it?

No, for a number of reasons:

1) It's the code license that matters, and the depends on what license the code the developer is building is using

2) License compatibility is undecided (see eg the different views of Apache Foundation and FSF on the compatibility of ASF 2.0 and GPL)

3) It's easy for someone to deliberately produce code that violates a license. MS is a big target and you can bet license trolls would chase it on that.

Probably more reasons, but there's a good start.

3) is not a good reason. "Big fish" is not an excuse to not provide protection. The burden to protect others from harm as a direct result of a feature of a product is on the owner of that product.

Not if it opens them up to false claims.

But when it does generate the same code, you're unaware of infringing :)