Earlier quoted context omitted.
People keep getting this wrong. Your license is irrelevant. Copilot depends entirely on being exempt from copyright restrictions (under fair use doctrine), and you cannot restrict this with any license, because they're not using that license. The only way you can stop them using your code so is to not share it with anyone. If they find your code (even via a leak!), they can legally use it, if their fair use claim is…
Copilot being fair use is what Microsoft claims (obviously), not an established fact. There is no precedent for this claim. (Nitpick: Fair use isn't an exemption from copyright, it's a defense for violating copyright)
Nitpick: Fair use is both a Constitutional and statutory (the latter codifying the former) limitation on the exclusive rights granted as part of copyright, so it's definitely an exception.
Procedurally, it operates as a defense, but that's not inconsistent with it being an exception.