The reason the tool is problematic is because derivative works are also copyrighted. LLMs aren't adding value to their output or using creative functionality. That are smashing multiple works together to produce a response. And, many of them are selling the output which is doubly problematic.
Consider this, if I sell a book about gandolf and Dumbledore getting into a wizards duel, both jk and Tolkien have grounds sue me. Adding another copyrighted source does not protect me.
This is especially a big problem in the music industry.
Now should copyrights be like this? I don't know. It feels to me that copyrights have the wrong balance all over the place.