I think that's the point of this blog post: it doesn't matter if the inputs are copyrighted, it matters if the output is infringing. It appears to be almost impossible to directly recreate a source image with SD, but it seems Copilot tends to produce a single input as its output, verbatim. Copilot isn't doing "synthesis" as does SD, it's acting more like a search engine.
They were prompted with the text "Mona Lisa Smile". Would you not say that they are an extremely close reproduction of the Mona Lisa, with barely any kind of synthesis?