How is this situation made any worse by these AI systems?
If a small time artist has their work stolen, they probably won't be able to fight it very well. They might be able to get a few taken down, but the sheer number will make it impossible to keep up.
Disney, on the other hand, will have armies of lawyers going after any copyright violation.
Because you are right: a few, and a small time artist can fight. Hundreds and thousands of copies, or millions, and even Disney struggles. That's why Disney would go after the model itself; it scales better.
If a small time artist has their work stolen, they probably won't be able to fight it very well. They might be able to get a few taken down, but the sheer number will make it impossible to keep up.
Disney, on the other hand, will have armies of lawyers going after any copyright violation.
It seems the same whether AI is involved or not.