The point is that the user is in fact now able to rearrange the grooves on the record like magic and the artist wants to limit their way to do this if the user rearranges the grooves in a way that match their own work.
Users can -download- specific bits and play them via decoding, and that's about it. Nobody can actually re-arrange anything themselves, although one could spend their life trying to manually flip bits to magically recreate it in the same manner. Good luck.
The artist isn't limiting anything other than sharing those pre-made bits without a license/permission. And that is not unreasonable. My stance on this is referring to works of art as merely "bits" for the sake of argument is a bit ridiculous. We don't refer to LPs as "a collection of atoms", etc.
Referring to art or products in general as "just bits" is just being pedantic for the sake of winning an argument.