Earlier quoted context omitted.
> It's equivalent to trying to sue a compression codec because a specific archive contains a copyrighted image. That's plainly untrue, as Stable Diffusion is not just the algorithm, but the trained model—trained on millions of copyrighted images.
Stable Diffusion is essentially a Compression Codec though. It's one optimised to compress real world images and art, by using statistics gathered from real world images and art. It's like the compression that occurs when I say "Mona Lisa" and you read it, and can know many aspects of that painting.
So while it would be possible to create a "Public Diffusion" that took the Stable Diffusion refinements of the ML techniques and created a model built solely out of public-domain art, as it stands, "Stable Diffusion" includes by definition the model that is built from the copyrighted works in question.