> Until AI generated imagery has been tested by the legal system it may be a bit too optimistic to call this "Royalty-free, copyright-free gallery of images".
Although it's conceivable there's a surprise legal finding, companies like OpenAI and Anthropic are confident enough in how it will go that they are willing to insure you for any lawsuits, which would be ruinous for them if they consistently lost.
(One can certainly argue that AI means the law should change, but that's a separate question.)
> If I grab a series of photos from shutterstock, run them through a generative AI photo enhance process to improve the white balance, contrast and levels is that adequate enough to be considered "copyright free"?
No, just like it's not enough for me to grab a photo and change white balance and contrast. AI doesn't change anything here. Copyright infringement is generally tested by comparing the two works directly.
> How different from a source image do these AI generated images need to be to be considered "copyright free"?
The same way it's always tested: "substantial similarity"
https://en.wikipedia.org/wiki/Substantial_similarity