I could see this being useful in a world with a few AI providers. However, in a world of commodity AI models, can simply use a model from an AI provider that does not watermark. Or download any open source model and run it themselves [0].

The only practical use I can see for this in the world we actually live in is to prevent model collapse. Most people using AI don't care if people training future AI ignore them, so would have no incentive to switch to providers that do not watermark. Of course, this disencetivises all if the pro-social applications of this technology, and risks giving the big providers a monopoly on "known human" data, which has serious antitrust implications.

[0] Note that the watermark is not inherent to the model itself, but rather how the model is run. So this teqnique cannot be used by people providing open-weight models. It would need to be used by those actually running the models.