This is an important and overlooked point. Even common permissive licenses (ISC / MIT / Apache-2.0) require attribution
The argument may make sense if they limited themselves to public-domain (CC0) works, but that is not what happened here. If CoPilot attributed something to an AGPL project, does it mean the "virality" applies to all projects that use code from CoPilot?
If that works, then I can't wait for that to be a boon for Wine and ReactOS: "Microsoft itself provided this code and allowed us to use it, so therefore it's totally legal. Neener neener."