Can I memorize copyrighted material and recite it on Youtube? What if I do so but imperfectly? Where do you draw the line? If it's infringement for a human to do that why is it not for a LLM?
Ask it to write a book similar to Harry Potter, and it'll make an attempt at it. But human writers absolutely do read Harry Potter and write similar books, and that's perfectly legal. There have probably been thousands of published books inspired by Lord of the Rings.