Earlier quoted context omitted.
The ethics partly depends on the analogy you choose. I can write a book about a boy wizard's adventures wizard school and that's legal, but if I call them Harry Potter it isn't. I can create Harry Potter fanart and distribute it online pretty freely - but slap it on a mug and sell it, and that's illegal. I can record an audio description of a painting that's as detailed as I like and it's legal to distribute - but ta…
Harry Potter is a trademark. It protects and distinguishes identity and authority. It is much harder to get a trademark, and is also harder to fairly use one. Different issue. If your fan art is infringing, it was infringing whether or not it was on a mug or on dropbox. Photograph one is not true. For commentary it can be by audio, or printed on a mug or whatever, commentary is transformative. Go out and take a photo…
Perhaps I should have said Darth Vader, then - the point is you can copyright a character independent of the copyright on a book's text, and the trademark on the series name, and the fact that broad concepts like "black-clad masked evil overlord" are uncopyrightable. And that copyright can persist even if you transform a book character into an engraved coffee mug.
> I'm not seeing an ethical difference from any of this. Or did I miss the point?
The difference is:
If a person says "Stable diffusion is to its copyrighted training data as an audio description is to a painting" or "Stable diffusion is to its copyrighted training data as the concept of boy wizards is to harry potter" they would probably say it's ethically fine.
If a person says "Stable diffusion is to its copyrighted training data as a photograph of a painting is to the painting" or "Stable diffusion is to its copyrighted training data as video lecture is to a single image in its slides" they might well say it's not ethical.