The key question is whether it is sufficiently "transformative". See Authors Guild vs Google, Kelly vs Arriba Soft, and Sony vs Universal. This is a way a judge could definitely rule, and at this point I think is the most likely outcome.

> Microsoft will forever be a pariah if they get away with this.

I doubt this. Talking to developers, it seems like the majority are pretty excited about coding assistants. Including the ones that many companies other than Microsoft (especially Anthropic) are putting out.