Two options.
1. This splits the anti-AI art movement between Luddites (not as a slur, just the best word for it) and copyright devotees. Copyright devotees will be happy with a solution like this because it fits the magic rules as well as any stock image database does. If a large enough bloc of copyright enthusiasts split off from the anti-AI movement over this, I strongly suspect that there's no longer any political space for the Luddites to get anything done at all. The response will basically be "They made it legal and now everyone's happy with it, what's the holdup?". The resulting implosion of the anti-AI movement is likely to mean that even "non-ethical" AI art tools like Stable Diffusion are eventually widely used if what they're doing is found to be legal in the US. There won't be any organised campaign left to oppose them, and it'll end up just being: If you want to have "ethical AI art", you use the models of very large corporations like Adobe, Microsoft, Disney etc, and if you don't view current AI art as unethical you can use open source or research derived AI art programs.
2. Most anti-AI people aren't actually copyright devotees, but rather Luddites that are just grabbing the most useful argument at this current moment. If this is the case, there won't be a substantial bloc splitting off from the anti-AI movement regardless of how legal and ethical a training database is made, and it will either succeed as an activist movement in forcing the government to make concessions (or splitting industry with boycotts), or it will fail after enough time has passed.
I don't know which way this goes. It's also leaving aside the questions of "Is Firefly actually any good at all, considering the inherently limited training data?" and "Will the United States government let any 'ethics' movement prevent the US remaining the best place for AI researchers to do their research, given the ongoing effort by China to recruit those researchers with better pay and benefits as the two powers enter a new Cold War?"
I am also really interested in what ends up happening with the EU and UK if the anti-AI movement succeeds in getting legal bans etc in the US. The EU has been unequivocal about supporting AI researchers, and the UK has gone well beyond that and given copyright exemptions for basically anyone doing AI research in the country, with no requirement of separation between researchers and businesses. Even if the anti-AI movement succeeds in the US, I don't see how that translates to success in the EU or the UK (or Japan, or China, etc).