> It is more likely they will argue fair use, but by not using closed repositories owned by paying customers, it seems to show that they themselves have doubt about the legal status of using other peoples copyrighted work for copilot.

Or they're worried about leaking secrets, which is a different matter entirely. The amount of copying needed to leak secrets is far lower than the amount needed to commit copyright infringement.

If Copilot is trained on Microsoft's code and accidentally regurgitates a comment, "// for 2024 Xbox", it has done one but not the other.