but they're not. Works derived stylistically are not copies.

Were they publishing copies, your harry potter analogy would hold, but that is categorically not the thing happening.

Diffusion is not compression, or copying. It's stylistic synthesis, which is more like someone reading all the Harry Potter books, then doing a podcast about Harry Potter fan fiction.

Which, incidentally, exists (1)

1 https://www.fanaticalfics.com/