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Doesn't seem clear to me.
I'm allowed to sketch out the Disney logo by hand, right? But I'm not allowed to place their trademark on any of my own products or services.
Microsoft's tool reproduces the Disney logo. Searching "Disney logo" in Google Images also reproduces the Disney logo. I can print the logo from my shitty black and white printer to my heart's content, right?
From Bing's terms of use, section 7:
I think they are arguing that using disney stuff as training data would be the infringement, and if the logo showed up in generated images, that would be proof they did that.
But I'm guessing because it is phrased weird if they meant that. Idk.
Seems like the lawyer thinks that AI models deliberately jumble the Disney logo rather than specific text/artifact/logo generation just being a weakness of these types of models. (He's wrong, he's attributing intent to something janky/buggy)