CSAM laws exist to punish abusers, and seek justice for the abused. Not one or the other, but both. The law cannot function without the victims, else you're just attacking people for what amounts to thought crimes.
I find CSAM and pedophiles disgusting, and I imagine 100% of HN users agree with me on this, but this just opens the door for world governments to a) claim LLM output is real and factual (!), but b) minimizes the danger to victims and equates victimhood to being a fictional character.
I'm not Danish and I'm hoping this is just some Dane-specific weird quirk of their law, but from what I can see, this is a politically-biased ruling to "think of the children".