You are misreading it and it's easy to do so. This is the money quote:

"Thaler does not assert that the Work was created with contribution from a human author"

All it takes is for the copyright submission for this Artist to say "I used a computer to generate this image through x y z steps selecting for q r s features until I was satisfied." I'm confident they would accept it.

This case is an attempt to set new precedent for copyright by granting it to a computer. And rightfully so, the Copyright office refuses to do so.

Well, I'm fairly certain one can claim ownership of works they create via algorithms, as the entire digital media space wouldn't exist. I don't think authoring or hosting an algorithm gives one carte blanche ownership over things other people create with that algorithm, but cynically I could see that happening if enough money is involved unfortunately, but hopefully not. It's not clear at all why AI would ever be considered the author and in fact all the sources I've found assert the opposite, that AI cannot be considered an author. So I still haven't seen anything preventing people from claiming copyright protections on works they create via AI.

The AI is controlled by the user prompting it.