Then refer to my first point, a pure AI generated output is likely to be uncopyrightable (the two commonly cited cases are the one where someone tried to assert copyright over photos taken by primates, and another where someone tried to assert copyright over music that was generated by a computer without human curation).

However, once they assert some transformative human involvement is mixed in, the combined work is copyrightable. So they do some token human manipulations of slop, keep the knowledge of what is slop and what is treated/human private and confidential, poof, copyright of 'lightly treated slop'. Similar to how the little mermad generally is public domain, however Disney's Ariel is copyrightable, despite originating from material exempt from copyright.