but it is still capable - by your own admission - of doing it

...

And if you are comparing LLMs and hammers, you’re just proving how you fundamentally misunderstand what LLMs are and how they work

And a regular hammer is capable of being used for murder. Which makes calling a hammer that evaporates before it can be used for murder "unethical" ridiculous. You're deliberately missing the point.

And it still profits from the unlicensed use of copyrighted works by using such material for its training data

I just don't buy this reasoning. If I look at paintings of the Eiffel Tower and then sell my own painting of the building, I'm not violating the copyright of any of the original painters unless what I paint is so similar to one of theirs that it violates fair use.

it is a composite of copyrighted work

It's stable diffusion, not a composite. But even if they were composites, I'm allowed to shred a magazine and make a composite image of something else. It's fair use until I use those pieces to create a copyrighted image.