I see this as "That thing which doesn't work is currently not working. Again."
The DMCA and copyright laws and regulations in the US are predatory nonsense, carefully crafted by lawyers in order to exploit the maximum amount of cash possible from people who actually do produce things.
The DMCA doesn't support artists and creators even indirectly; it empowers those least deserving and most ruthless to steal the profit, pat themselves on the back, and moralize about "following the law" to everyone else.
Copyright should be implicit and ironclad for 5 years. After that, 99.999% of sales have been made, whether your material is digital or otherwise. From 5 to 20 years, you should retain right to profits from the sale of any copy, but it should be 100% legal to copy, distribute, archive, remix, or whatever else you want with it so long as you aren't trying to sell it. After 20 years, public domain, no exceptions, no carveouts for family, friends, crafty lawyers, important politicians, or anyone else. No grandfathering, no special rules for special people.
Things made with AI should be protected by copyright, with the rights held by the user of the tool that generated the image. Like any other digital art.
There are machines that can paint your Dall-E renaissance creation onto a canvas with the style of your favorite master. The tools we have at hand have empowered us to rapidly and easily explore a vast domain of images, videos, music, voices, creative writing, and to do research and technical projects and write code in ways that were unthinkable 10 years ago.
These judges and lawyers think it's ok for them to rule on things without having the slightest clue as to the operation, function, and consequences of the technology - this ruling does nothing except to reinforce the status quo and empower the entrenched rights holders - the massive corporations, platforms, "studios", agents, and miscellaneous other gaggles of lawyers who trade in rights to media, but produce nothing of value in themselves.
Imagine a world in which content creators got paid a fair return relative to the revenue generated by their work, in which platforms and interlopers were limited to something like 5% of the total generated profit per work, after cost (to the creator). There'd be no incentive for bullshit rulings like this, with no angry mobs of litigious bastards with nothing better to do than sue for tampering with their racket. I cannot possibly see any other path to this ruling than this; else this judge is fortunate beyond words that his community has so uplifted the mentally deficient among them.