There's two very separate reasons I find this a bad look for YC.

1. The very cavalier response from the founders about the licensing issue. "dawg I chatgpt'd the license" is not a valid legal defense. Had they immediately owned up to the mistake and said "This was an oversight on our part and we are immediately restoring the content of the Apache license" it would not have been an issue. But Open Source only works if people follow the rules.

2. In general, this is just an indication that YC is not the quality filter it once was. It seems they are more interested in founders online following (the founders are both YouTubers with significant channel sizes) than they are about the business itself.