Earlier quoted context omitted.
Fair use is a defense. You can still be sued for fair use, you have to go to court and prove to a judge or jury that your work constitutes fair use.
Yes but we have a common law system and there's already tons of precedent that training AI systems is transformative. It's also quite obvious just by looking at the generated images that it's clearly transformative. The images generated are unique and you can't trace the original copyrighted image from what's generated. You really don't need a judge to see that Fair Use covers Stable Diffusion.
Federal lawsuits are not cheap and the default is that you pay your own costs, you have to win the argument that you should get court costs & attorney's fees.