There seems to be a sockpuppet constituency desperately trying to sell "yes" as an answer to this question.

It's hard to see how the endgame of this nonsense is anything but total thought control (couched with semantic distinctions between "thought" as it occurs in your biomass and "thought" as simulated in an electronic device).

probably (but I doubt there is case law here because suing a child for copyright infringement would be a really bad look)

Wait. In this analogy, you think that even watching the film counts as copyright infringement? To be clear, stability have not used SD to generate an image which is infringing, they have merely trained a model which someone else could use to generate (allegedly) infringing material.

no. the problem in this analogy would be the copying. i.e. making the drawing

But Stability hasn't done that so what's with the lawsuit?

If their parents are selling credits so that people can buy novel pictures with pretty good likenesses of Disney characters drawn by their kid, they probably have.