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Your TOS matters insofar as you can prove a person actually read and agreed to it. These are illegal in different ways:

1. Copyright violations (can put you in jail) 2. TOS violations (will be a fine at worst)

Companies do get away with drive-by legal shittiness way too often and frankly the practice needs to be reined in, but at the end of the day the only damages are the financial ones you can prove in court.

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And what if the LLM ingested and “understood” it as part of its training?

Well, I guess that's a personal question but the law is pretty clear that only a human being can "understand" anything.

How convenient.

Incidentally, this suggests that once an LLM is capable of accessing and distilling a competitor's LLM without human intervention, then any legal argument about TOS violation is moot. But somehow I doubt that will fly in court.

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