Maybe you're right, maybe you're wrong.
I'll give the best example, the one task that off the top of my head that I would like some AI help with.
I would really like to replicate the functionality of Java's SSLEngine, but for C#.
If I used Co-Pilot to help, at best, I would need to pay for a legal team to do some form of 'clean room' review of whatever was generated to make sure it did not infringe on the OpenJDK code that is out there. At worst, I would be having to defend myself from Oracle's legal team -anyway-.
And yeah, I'm assuming in this case that Copilot would be 'smart' enough to be able to make the right inferences of that java code and put it into workable C# construct. Stepping back, though, one could still ask the question; what's the risk of a Java developer accidentally getting some OpenJDK code a little too closely? There's an order of magnitude difference between even a smaller AGPL developer and Oracle.
If Microsoft/GH was willing to go to bat and agree to pay for the defense of users of Copilot, I would be far less concerned with the implications of all of this.