We certainly need measures to prevent defamation by LLMs, or any text generators, and their creators. It's challenging to determine where to draw the line—from decryption tools that decipher random bits, to web browsers displaying text, to simple text editors, to n-gram Markov chain text generators, to shallow RNNs, to GPT-1, and beyond. Should we hold the tool creators or the tool users accountable for misuse?
In my view, the worst outcome of the NYT winning the lawsuit wouldn't be OpenAI halting progress in generative text tools. The real concern is that OpenAI, with its resources, might find technological solutions to these issues, while startups and hobbyists with limited resources could be forced to stop operating entirely.
That's the best outcome in many more views than yours.
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...so I asked ChatGPT to help me understand the first chapter (80 pages). The chapter ends with the narrator being called "Maury," so I asked AI "is TS&tFury narrated by Maury?" It responded "no, it's Benjy" (which was initially more confusing than just reading Faulkner).
But upon further questioning (without actually knowing, for certain, as reader), it turns out that it does arrive at [I presume correctly..?] the correct response, which is that Benjy IS Maury.
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So while it was overall helpful, it took coaxing from a not-even-done-with book avid reader. I took the AI's last piece of advice, which was to purchase a human-authored companion reader for TS&tFury =P