If it's only OK to scrape, lossy-compress, and redistribute book-paragraphs when it gets blended into a huge library of other attempts, then that's only going to empower big players that can afford to operate at that scale.
Nope. The law will side with whoever pays the most. Once OpenAI solidifies its top position, only then will regulations kick in. Take YouTube, for example—it grew thanks to piracy. Now, as the leader, ContentID and DMCA rules work in its favor, blocking competition. If TikTok wasn’t a copyright-ignoring Chinese company, it would’ve been dead on arrival.