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Your second bit is exactly the case. The copyright protects artists here, and Japan doesn’t care about indie artists. The megacorporations will benefit more from AI than they will lose out from it.
It sounds like you’re familiar with Japan, so I’m guessing you also know what the political climate is there. This makes a lot of sense.
Yeah, in retrospect it does seem on brand for Japan. Just feels weird after being used to them cracking down on anything even mildly copyright infringing.