Earlier quoted context omitted.
So, does this mean that people can simply argue in court now (if they were to be prosecuted for downloading media via bittorrent) that it is fair use if they used it to train a local model on their machine?
People could always simply argue in court that their torrenting was free use. If you're just some nobody representing yourself instead of an expensive lawyer acting on behalf of a large company, maybe the judge will even try to be extra nice when he explains why the argument doesn't hold water.
Many judges take a dim view of expensive lawyers trying to pull the wool over their eyes with sophisticated but fallacious arguments. You have to deal with a lot of BS to be a long-standing judge, so it seems like resistance to BS may be selected for among judges.