No, people are not allowed to just read code on the Internet and then write code themselves. It depends on what the code is that they write and how similar it is to the code they read and how creative the original code is.

For example, I'm developing an algorithm to merge two binary files of the same type, a completely new algorithm. Say someone reads the code for that algorithm when I am done and implements the same thing using the same algorithm, but refuses to put the AGPL on it (because that will be the license). Are they infringing? Absolutely.

This has, in fact, happened with the Fast Inverse Square Root algorithm, whose code is under the GPL. Copilot reproduced it verbatim, including swearing comments. [1]

People are not being ridiculous about this because it has already happened!

EDIT: Fixed a small mistake.

[1]: https://twitter.com/mitsuhiko/status/1410886329924194309