rap genius is not derivative. its transformative, and therefore falls under fair use. Its also UGC, which as noted is specifically granted safe harbor under the DMCA.
That aside, even the resulting product does not seem to fit the "originality" test:
"Revisions, annotations or other cosmetic alterations to the work do not qualify as originality; the work must be unique to the author, using only minor elements of other copyrights. The court generally defines this as 'distinguishable variation' between the two works. In other words, the works must be obviously substantially different for the change to be considered transformative under law."
While the annotation layer is certainly unique and distinguishable, the lyrics are not "transformed" into a distinguishable variation, they are left in their original state on their site.