I'm all for changing copyright to allow the stuff Warhol did, but I don't think this is substantially different at all. It's a direct copy of a picture with a coloured background. The angle, lighting, position, and expression, all probably directed by the photographer, are identical. This is the manual equivalent of an Instagram filter.

The two images don't compete in the same market, but that's not relevant for copyright. I think it perhaps should be, but as it stands, the law shouldn't be interpreted like this.

Imagine another type of copyrighted work, such as open source software, being reproduced against the terms of its license but with all names (variables etc.) changed, perhaps translated into another language or capitalised. The style of the work has definitely been changed, much like Warhol's style is very different from a photograph, but the product is very much a derivative that should be used in the terms set forth by the original author.

Also consider the effect this would have on the internet: if Google/Facebook/Bytedance were to be allowed to just scrape images online and sell them as their own after applying a black-and-white filter, any photographer would probably be up in arms.