It will vary by country. In a lot of Europe and the US the content will still be illegal. In Japan it won’t be. At some point the issue is going to come down to what you want to spend manpower and money fighting, people who actually endanger and harm children, or people who use computers to emulate it. It might not be a very clear cut thing though, because I frankly wouldn’t be shocked to find out that the overlap between people who want pornography of real and simulated children is significant.
Where it might be a little more clear cut is feeding the market that clearly exists for “teen” porn, which is currently filled by 18+ actresses. I suspect a non-trivial percentage of the non-child-abusing population would consume simulated 16 year old porn without ever considering the real thing. In that case you might see some changes.
Reply edit It’s already outlawed. In the US for example pornographic drawings of children are outlawed. In the same way it’s illegal to try and sell cocaine stimulants, it’s illegal to try and sell child pornography simulations. I doubt the A.I. itself would be illegal, just its output.