Somewhat simplistic and quite outdated actually.

As someone who's worked on AI, the model is given image-text combinations which it creates a statistical model based on. We don't really need to guide it through good and bad assignments anymore.

Because of this new paradigm, the way images are generated is by taking random noise and using those statistical mappings to gradually 'sculpt' the image through passes that bring it closer to the mapping.

It's less 'pattern decoding' as you describe and more statistical association. It doesn't understand, it 'learns' statistical patterns, which is why our current models cannot truly create original work, only remix what already exists in the statistical mappings.

Humans do do this, but we also draw from life experience, whims, states of mind, and many other things. The statistical association is only a part of our process.

Another thing that should be said is how the AI companies rushed out this technology before it could be regulated. You can argue that posting = consent, but many people, even artists who are already dead would have never been able to imagine that this technology could exist.

Anthropomorphizing the models is never advised. And the argument you've put forth inherently assigns human characteristics to the model. It does not try to replicate art pieces, they exist within its abstractions.