@nprofile1q... > Ultimately though what matters for infringement is whether the original work was substantially used to produce the new work (regardless of the exact process) - and clearly that's the case.
This is completely incorrect.
You could cut a picture into a billion pixels and reconstitute them as a completely different picture without infringing anyone's copyright.
Copyright has nothing to do with whether the constituent components came from a copyrighted work. That's just completely wrong